Kilroot power station faces shutdown with loss of 240 jobs

By John Campbell
BBC News NI Economics & Business Editor

Media caption,
Where does Northern Ireland's electricity come from?

Kilroot power station in County Antrim is facing closure within months with the loss of up to 240 jobs.

A further 30 jobs are under threat at Ballylumford power station.

Kilroot failed to win a major generation contract in an auction process to supply the all-island Single Electricity Market (SEM).

Image caption,
Kilroot power station, near Carrickfergus, failed to win a major contract

Reforms to the SEM take effect later this year with a series of new one-year contracts intended to increase competition and lower prices.

It is understood that maintenance costs were a significant factor in the Kilroot bid.

East Antrim MP Sammy Wilson said the effect of the job losses at Kilroot and Ballylumford "cannot be underestimated".

Media caption,
'Without Kilroot we would not have been able to keep the lights on in NI' - Sammy Wilson

Kilroot, near Carrickfergus, is one of Northern Ireland's main power plants and uses relatively old and inefficient coal-fired generation.

It was always likely to face closure in 2024 as the coal-burning technology would not meet environmental standards.

Kilroot's owner, AES, said that without a new contract the power station cannot cover its costs so is now expected to close when the new market begins operating at the end of May.

At the scene

Richard Morgan, BBC News NI reporter

It's understood management is due to meet staff to discuss what happens next.

We've been told by one representative that it's thought a 90-day notice for redundancies could be issued as early as today.

It's going to be an anxious wait for staff - they're facing the prospect of closure in May this year, which is much sooner than they had anticipated.

Image caption,
Kilroot power station on Friday morning, after news broke that it would be closing

AES UK & Ireland president Ian Luney said that over the last three years Kilroot met 22% of local electricity demand and he was "surprised" at the decision not to award the contract.

A contract relating to part of the Ballylumford power station, near Islandmagee, has also not been renewed, threatening 30 jobs there.

Of the other jobs, 120 are staff at Kilroot and the other 120 relate to contractors.

The chief executive of the Utility Regulator, Jenny Pyper, said it was important to note that the SEM auction only allocates capacity for the next year.

"There will continue to be commercial opportunities for new and existing generators to participate in the market in further auctions later this year," she said.

She said the decision to close the Kilroot plant has now triggered the Plant Closure Process which is designed to ensure security of supply and the needs of the system continue to be met.

Robin McCormick, general manager of SONI - the System Operator for Northern Ireland - said: "We are confident that the generators who have been successful in that auction process will provide sufficient and secure generation for NI at the lowest possible cost."

'Significant risk'

Image caption,
Kilroot was likely to close by 2024 because its coal-fired technology would not meet environmental standards

Mr Luney, of Kilroot's owner AES said he was concerned that the closure could lead to supply problems.

"With the likely absence of any significant and reliable new generation in the next four years and a North-South interconnector that isn't expected to come online until 2021, we are concerned that the removal of capacity at Kilroot and Ballylumford could contribute to a significant risk to the security and stability of supply in Northern Ireland," he said.

Image caption,
Kilroot is one of Northern Ireland's main power stations

Mr Wilson, a DUP MP, also raised concerns over the "continuity of electricity supply and the price of electricity".

He said that an explanation must be given as to how "energy delivered by Kilroot in the past three years is now going to be delivered efficiently and without disruption".

"I don't believe that the assurances sought will be given and, if that is the case, then immediate steps must be taken to arrange a contract with AES which will keep electricity flowing into the system," he said.

'Forced closure'

Alliance Party MLA Stewart Dickson said the decision not to award Kilroot a contract seemed "premature and potentially counter-productive".

He said he was "deeply concerned" about the impact job losses will have on the local area as well as the security of Northern Ireland's electricity supply.

TUV leader Jim Allister said the closure was the consequence of the "dash" to establish an all-island single energy market.

Image caption,
Kilroot uses coal to generate power

"As we lose generating capacity and control, Northern Ireland may well be at the painful end of the ROI-orientated change, which is being rushed in with no proper transition period or protections on security or supply."

Joanne McWilliams, regional officer for trade union Unite, said the closure "effectively shuts down 36% of Northern Ireland's electrical generation capacity" and was a "disaster for local jobs and security of supply".

The new market has been designed by the utility regulators on both sides of the border and the auction process was run by the Eirgrid group, which operates the electricity gird.

It is understood that Eirgrid assesses that supply issues will not arise before 2021 and thereafter will be dealt with by the new Interconnector.

Rodney Doyle, Director of Market Operations at EirGrid Group, said the auction had been "a major milestone" as the industry transitions to the new market arrangements.

"The auction successfully ran in accordance with the approved capacity market code," he said.

"There were 100 bidders in the auction, of which 93 were successful."