Carlton Power Hit with Termination Notice after Investment Deadline

Carlton Power Hit with Termination Notice after Investment Deadline

Carlton Power has been served with a termination notice from the National Grid after it missed its deadline to secure investment (July 2).

However, Amber Rudd, Energy Secretary, has given the developer extra time (until December 16) to find financial backing.

Two years ago the plant was given a subsidy of £30 million per year for the next 15 year period as part of the government’s first capacity market auction, which was subject to it securing a decision on its financial investment by July 2.

After it missed this deadline, the developer was given an extension until September 26, but the government has now extended this to December 16.

If they fail to find a financial backer for the scheme, then the subsidy contract will be terminated along with a fine of over £8 million.

Should the contract be cancelled, then the company would have to wait until December 2017 to enter the next available capacity market auction, which could result in the scheme being delayed by a number of years or see it completely scrapped.

It was reported last month that Carlton Power faced a race against time to find a financial backer for the 1.9GW plant but at the time one of its engineers, Mark Pankhurst said that the company remained confident of nailing down an investor before the July 2 deadline.

However, the firm insists that negotiations are still ongoing with a number of potential financial backers.

The Trafford plant is a key part of the government’s plans to construct the required number of energy plants to power UK homes and if it is built, the £800 million site would be one of the UK’s biggest energy developments and could power over 2.2 million homes.

In September 2014, Ferrovial Agroman, Tecnicas Reunidas and GE were chosen as the EPC contractors for the project.

Share this post