E.ON Halts Plans for Kingsnorth Facility

E.ON have decided to cancel the construction plans for their coal-fired power station, Kingsnorth, after controversy has plagued the site for more than two years. The German utility giant has been awaiting a green light for two years now in order to build Kingsnorth, which would be Britain’s first coal-fired facility in decades. 

The plans went south, however, when environmentalists caught wind of the plant and began protesting new coal fired facilities in Britain. Thousands of protestors quickly descended on the site, where the existing Kingsnorth plant is in Kent. 

Yesterday, E.ON briefly announced via its website that it would abandon plans to go ahead with 1600MW facility. The website claimed that a sharp fall in energy demand had caused the company to make the final decision to pull out. The company also made it clear it would reconsider the original plans in two to three years time, stating the project could go ahead if energy prices were to recover. 

Although the government’s delayed decisions to approve the project were not the direct cause, insiders at E.ON have expressed frustrations with the governments lack of response for nearly two years. E.ON was granted permission to build the facility if it included new, expensive carbon capture and storage technology (CCS). However, the technology relies on government subsidy, which E.ON had bid for along with several other energy companies in a government sponsored competition beginning in late 2007. 

However, it has been two years and no winners for the competition have been named as a recipient for the subsidy. Other industry players include Scottish Power and Peel Energy, owned by RWE npower. 

E.ON, becoming frustrated with the lack of results, has pulled out of the government competition and halted plans for the Kingsnorth facility. Other companies involved in the competition have also complained that the government is so far unwilling to put forth the cost of the competition, thus delaying the demonstration. So far there are no scheduled dates for a winning entry to be announced and build.