Kilroot closure: Market forces prove undoing of plant
The boss of Kilroot power station has blamed Northern Ireland’s energy regulator and system operator for the firm’s “hugely disappointing” decision to shut the plant, which will see 270 jobs go.
The facility, which is owned and run by AES, will close in May after its bid to supply electricity here was passed over.
Around 30 jobs will also go at its Ballylumford plant.
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AES boss Ian Luney said staff will now enter a 90-day process ahead of redundancies in April.
Asked who he and the staff should blame for the closure of the plant, he said: “Our staff know the arrangements... they know it’s the process of the auction, and the design of it, and the decisions made by the regulator and TSOs (System Operator for Northern Ireland/SONI and Eirgrid) have led to this decision. They are crystal clear.”
Kilroot failed to be selected for a large chunk of energy provision as part of the new all-island integrated single electricity market (I-SEM), which kicks in later this year.
Its imminent shutdown has prompted concerns of “wide-reaching implications” for the region amid claims the lights could go out in Northern Ireland.
Mr Luney (below) said “people are obviously devastated” that jobs are being lost.
“We are starting that statutory consultation with unions on Monday. It will last 90 days, and then we will move into a period of redundancy for those people. They will leave the business on May 23, or shortly thereafter.”
The firm has submitted a closure notice for Kilroot on May 23.
The power plant was not selected in the auction because of the cost of AES’s bid.
Mr Luney claimed the absence of an Executive had made the process “more difficult”.
He said, despite reassurances from SONI and the Utility Regular, that there was “no clarity where the replacement energy will come from” following Kilroot’s closure.
The job losses at Ballylumford will come on stream in December.
He said staff were briefed yesterday morning about the “hugely disappointing news”.
But he added it “wasn’t a shock” that closure had been coming down the line.
He explained that in June statutory maintenance meant the plant’s main units were out of service.
As a result “you lose all your market revenue”, he said.
“Our bids, our fixed costs... were higher than they would ordinarily be. You have to cover those costs.”
He said following that AES was granted an exemption from the Utility Regulator to bid above the normal price cap for supply contracts.
SONI general manager Robin McCormick dismissed concerns that there could be insufficient electricity generation for the province as a result of Kilroot’s closure.
“We are confident that the generators who have been successful in that auction process will provide sufficient and secure generation for Northern Ireland at the lowest possible cost,” he said.
He added that the Utility Regulator had estimated the latest auction would save customers on both sides of the border £175m. “The auction reflects the diversity of generation participating in the single electricity market,” he said.
Jenny Pyper, chief executive of the Utility Regular, said as part of the auction process it was not only concerned with security of supply, but also that “consumers only pay for generation that is actually required”.
She said the outcome would see savings of £50m a year for Northern Ireland households.
“AES have only just notified us that they are seeking early closure of some of their Kilroot plant which was unsuccessful in the auction,” she added.
Asked is there was any way the plant could be saved, Mr Luney said: “That is a question that needs to be assessed. We are in solution finding... we are absolutely focused on treating our staff with the clarity and certainty that they need in this terrible time. If someone says there is a need for a service or product, because Kilroot is closing, over the longer term... we are willing to play a role in finding that solution. But no one has raised that with us.”
North Antrim DUP MP Ian Paisley welcomed the opportunity for the Northern Ireland Affairs Committee to investigate issues surrounding the closure of Kilroot.
Sinn Fein MLA Cathal Boylan called on AES to lift the closure threat, and said it had an obligation to give three years’ notice of a closedown.
“AES has made substantial profits from their contracts selling electricity here and they have a responsibility to their workforce and suppliers, which they must honour rather than seeking to abandon them,” he argued.
But Mr Luney said, with a new annual auction, that was no longer realistic.
Consumer Council chief executive John French said: “Assurances will need to be provided to Northern Ireland consumers about the long and medium-term cost and reliability of electricity.”
Belfast Telegraph Digital