LONDON (Reuters) - Britain's Rugeley coal plant will close this summer due to worsening market conditions for coal generation, with the potential loss of 150 jobs, operator Engie said on Monday.
The one-gigawatt plant, located in Staffordshire, is jointly owned by French power and gas group Engie and Mitsui & Co. Ltd. It can provide enough electricity to power one million homes.
A surge in renewable energy production and cheap gas prices have effectively priced coal-fired power plants out of the market in Britain.
"Unfortunately market conditions for UK coal plant have deteriorated rapidly in recent years, as a result of a continued fall in power prices on the back of a commodity market decline, and increases in carbon costs," Engie said in a statement.
"Under such conditions, there is no prospect of the power station recovering its future operating costs," it added.
Earlier this month, British power producer SSE (L:SSE) said it would likely close most of the units at its 1,995-megawatt Fiddler's Ferry coal-fired plant from April 1.
Investment bank Jefferies said it expects more coal plant closures this year in Britain if the relative profitability of burning gas over coal by utilities continues.
Engie plans to sell 15 to 20 billion euros worth of assets over 2016-18, including 7 billion euros ($7.8 billion) in the short term, French newsletter La Lettre de l'Expansion reported on Monday.
The newsletter said Engie plans to sell 2.5 to 3 billion euros worth of exploration and production assets, 2 to 3 billion euros of coal-fired power plants, 5 billion euros worth of U.S. plants, and some infrastructure assets.
An Engie spokesperson was not immediately available to comment on that report.