LONDON (Reuters) - Britain's Eggborough coal-fired power plant has signed a contract with National Grid (L:NG) which will enable it to remain open until March 2017, a year longer than previously planned, its owner said on Tuesday.
Eggborough Power Limited was awarded a contract under the National Grid's so-called Supplemental Balancing Reserve (SBR) scheme to provide back up power next winter.
In September, the 2,000 megawatt power station was earmarked for closure, putting 262 jobs at risk, as it was too costly to continue running.
The 53-year-old plant's contract with National Grid covers 775 megawatts of capacity and will secure up to 235 jobs, Eggborough Power said in a statement.
A series of closures at coal-fired plants due to environmental regulations and the mothballing of some unprofitable gas plants has reduced Britain's generating capacity over the last few years, forcing National Grid to take measures to ensure the country's lights stay on.
Electricity prices traded on the open market have fallen 20-35 percent in recent months as milder-than-normal weather has curbed demand. Costs for coal plants have also soared since Britain's carbon tax doubled last April to 18.08 pounds ($27.68) per tonne of carbon dioxide (CO2) emitted.
Earlier this month Engie (PA:ENGIE) said it would close Britain's Rugeley coal plant this summer due to worsening market conditions for coal generation, while SSE (L:SSE) will likely close most of the units at its Fiddler's Ferry plant from April 1.