SSE to shut two UK coal plants by end 2023

By Karolin Schaps

LONDON, Dec 20 (Reuters) - UK power producer SSE (Munich: SCT.MU - news) will shut down the remaining units at its Ferrybridge and Uskmouth coal-fired power plants by the end of 2023 at the latest to comply with EU laws curbing harmful emissions, the company said on Friday.

The closures come on top of a loss of 2,000 megawatts of SSE (LSE: SSE.L - news) 's thermal power generation capacity by end-March 2014, which the utility announced earlier this year.

"There are many uncertainties surrounding the future operation of generation assets in the UK and these make it hard to take balanced decisions that minimise risk," SSE's Managing Director of Generation, Paul Smith, said in a statement.

The EU-wide Industrial Emissions Directive (IED), which will come into effect in 2016, imposes limits on emissions of climate-harming gases, tightening rules of an existing legislation named the Large Combustion Plant Directive (LCPD).

Power plant owners have to decide before the start of 2014 whether to fit their stations with technology that allows them to comply with the tighter rules or to shut down their plants by the end of 2023 at the latest.

SSE decided on Friday not to install the technology at two units of its Ferrybridge coal plant in Yorkshire and its Uskmouth power plant in Wales.

Two other units at Ferrybridge are already expected to shut down under the LCPD by the end of March 2014.

SSE also announced on Friday it would make a 15 million pound ($25 million) investment in its Peterhead gas-fired power plant in Scotland to allow the plant to operate more flexibly.

A spokesman for SSE said it was an option for Peterhead to participate in Britain's capacity market auction, a new mechanism to start in 2018 that is designed to help back up intermittent renewable energy production.