By Susanna Twidale
LONDON (Reuters) - British power firm SSE (LON:SSE) will keep its Fiddler's Ferry coal-fired power station near Manchester open until at least March 31, 2017, it said on Wednesday, having previously said it would likely close this year.
The decision was made after the plant secured a contract under a scheme run by National Grid (LON:NG) to provide backup power for winter 2016/17.
"Challenging economic and environmental conditions for coal as the UK cleans its electricity mix mean that the longer-term future of the site remains uncertain but we are very pleased to have secured this 12-month contract," Martin Pibworth, Managing Director, Wholesale, for SSE said in a statement.
SSE said it would also enter all or part of the plants near 2 gigawatts of capacity into the country's capacity market auction being held for 2017/18.
The auction rewards successful bidders for keeping power plants on standby so they can be called upon when renewable energy production is low or demand is high, and are the government's major tool for ensuring the lights say on at a time when the country's generating capacity is its level in more than 20 years.
The government announced earlier this month it would bring the scheme forward by a year, to 2017/2018, to avert a looming electricity supply crunch.
The Fiddler's Ferry power plant, which employs 213 people won a 2018/19 capacity market contract for three of its units in Britain's first ever capacity market auction but was unsuccessful in securing a contract for 2019/20.
Coal-fired power plants provided around a quarter of the country’s electricity last year but several coal plants including Ibedrola (MC:IBE) owned Scottish Power's Longannet and SSE's Ferrybridge have already closed.
Engie (PA:ENGIE) said it will likely close its Rugeley coal plant in this summer.
(editing by David Evans) OLGBBUS Reuters UK Online Report Business News 20160330T163515+0000