Newspaper article Evening Chronicle (Newcastle, England)

Fresh Concern for Jobs of 130 Staff at Power Station

Newspaper article Evening Chronicle (Newcastle, England)

Fresh Concern for Jobs of 130 Staff at Power Station

Article excerpt

Byline: Peter McCusker Reporter @mccusker60

A "CLOUD of doubt" has been cast over the future of a North East power station as a result of Chancellor George Osborne's budget, says an MP.

Last week's Budget saw Chancellor George Osborne announce the ending of the Climate Change Levy.

In Northumberland, that set the alarm bells ringing at the Lynemouth coal-fired power plant, which is set to be converted to biomass in a bid to continue operating and save the jobs of its 130-plus workers.

This conversion programme is already way behind schedule following a challenge by the European Commission over proposed UK Government subsidy payments, and the latest announcement has added to concerns these proposals may be axed.

More than 500 jobs were lost at Lynemouth when the nearby Alcan smelter closed three years ago and - though plans are being developed for the former smelter site - the area can ill afford further largescale job losses.

German company RWE npower, which operates the 400MW power station through its Lynemouth Power Ltd subsidiary, said it would have to study 'the budget announcement in closer detail' before determining its strategy. It said its most pressing issue is the European Commission state aid rule decision, which is due by the autumn. The station will continue to operate as normal in the meantime.

RWE said: "Since June 2014, Lynemouth Power Ltd has been awaiting the European Commission's decision on whether the FID Enabling Investment Contract for its biomass conversion is in line with EU state aid rules.

"During February 2015 the Commission announced a decision to initiate a further review of the case.

"We remain hopeful the matter will be resolved, but this has been disappointing as it delayed our ability to make an investment decision on the project.

"In light of the recent budget announcement we are currently assessing if there is any impact on the biomass conversion project and are working closely with the UK Government. …

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