Power plant to be mothballed
APOWER station will be placed into a “dormant state” after its energy firm owners went into administration.
Severn Power Station, Newport, will be put into a state of “managed preservation” to allow more time to recover value for creditors, its administrators have revealed.
Calon Energy Limited, which operates Severn Power Station in Newport, Baglan Bay Power Station in Port Talbot and Sutton Bridge Power Station, Lincolnshire, went into administration in June.
Administrators KPMG said Sutton Bridge Power Station will also be mothballed, while Baglan Bay is currently unaffected. Severn Power Station and Sutton Bridge each employ 68 workers, while 38 staff are employed at Baglan Bay.
Jim Tucker and David Pike, from KPMG’s restructuring practice, have this week been appointed joint administrators of a number of operating companies of the Calon Energy group.
It follows the appointment of administrators over the holding company, Calon Energy Limited, on June 24.
Calon Energy is an independent power producer operating across the three sites in Newport, Lincolnshire and Port Talbot.
A KPMG spokesman said no jobs are currently at risk and all staff are being retained at all sites until at least September 30. The administrators will be reviewing workforce requirements in October.
Mr Tucker, restructuring partner at KPMG and joint administrator, said: “Following the appointment of administrators over Calon Energy Limited, the group’s Topco, on June 24, CEL’s administrators have worked closely with the senior management team and key stakeholders to consider a number of options in relation to CEL’s operating subsidiaries.
“The recent and ongoing challenges facing the UK power market mean that these power stations are currently not generating sufficient returns to continue trading effectively. It has therefore been determined that the power plants will be placed into a safe and dormant state of managed preservation.”