Thursday, 29 January 2009

Eon talks with contractors over £1.5bn Kingsnorth job

Energy giant Eon has been meeting with contractors to determine exactly how funds for the £1.5 billion Kingsnorth power station rebuild will be spent – as the Government continues to debate approval for the key scheme.
Laing O'Rourke, Morgan Est, Balfour Beatty, Kier, Bam Nuttall and a Costain/Hochtief joint venture are all bidding for the work, which has been divided into four packages – piling, enabling works, cooling water system civils works and the 'power island' (the main building).
One bidder said: "It's difficult to say how much each package will be worth, there's a lot of work being done to evaluate them.
"And everything depends on when the Government gives approval for the job, it feels like we could still be a long way off."
A major factor in the delays is Eon's desire to pioneer carbon capture storage technology at Kingsnorth, due to its target of reducing the carbon output of its electricity generation by 10 per cent by 2012.
It is understood Eon is reluctant to commit itself to building the station if future regulations could make it impossible to fit the plant with CCS technology, which is not included in the initial cost.
The Government continues to debate whether or not to allow a CCS facility to be built at the site.
A spokeswoman for the Department for Energy and Climate Change said: "No date has been set for an announcement on Kingsnorth. Eon has asked us to delay making a decision until after the CCS consultation."
Meanwhile, the bidding process is ongoing and contractors are due to meet with Eon again over the coming weeks, after which a shortlist is set to be drawn up.
If approved, the new Kingsnorth plant will be the first coal-fired station to be built in Britain for more than three decades and the job could be the first in a series of projects from Eon. The energy firm is investing more than £500 million in the renewable energy sector over the next five years, according to Emap Glenigan.
A Bam Nuttall spokesman said: "The work at Kingsnorth is particularly important as there is lots of potential business coming from private energy suppliers over the next few years."
The current 1960s coal-fired plant at Kingsnorth is due to close by the end of 2015 because it cannot meet new European legislation on emissions targets.
The project has been dogged by controversy and was targeted by climate change campaigners protesting at Eon's Coventry headquarters.
The demonstration – which saw members of the Climate Camp group glue themselves to doors at the Westwood Business Park premises while others attempted to scale the building – followed demonstrations at Eon's offices in London at the end of last year.
Cost (£m) Location Description
300 Bristol 150 MW biomass power station
66 Doncaster 22 wind turbines
60 Sheffield 25 MW biomass power station
13 Highlands 25 wind turbines
32 Strathclyde 14 wind turbines
30 Stockton-on-Tees 10 wind turbines
26 Northampton 7 wind turbines

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