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Closure of Coryton puts focus on future energy solutions

by LLB Editor
15th Jun 12 3:57 pm

Hundreds of jobs are expected to be lost at an oil refinery which serves London after the government decided not to apply for permission to use state funds.

Coryton oil refinery in Essex is now facing closure after its parent company, Swiss-based Petroplus, went into liquidation. Ministers decided not to ask the European Commission for permission to prop up the refinery with state funds.

The decision has been criticised by unions, who had urged the government to put up cash to keep the refinery going until administrators finish their search for a buyer. The refinery’s closure will drain £100m from the economy, they said.

Ministers believe it would not be sustainable to provide government help because of overcapacity in the refining industry.

The government has moved swiftly to deny the closure of Coryton will have an impact on fuel supplies in London and the South East.

“There are many other supply points and operational refineries which can be used,” said a government spokesman.

FACTS Global Energy said refineries in the UK are only running at approximately 80 per cent capacity and so could easily increase activity to make up any shortfall. The group said what the UK does not produce for its own needs could easily be imported from other countries where there is also excess capacity.

The demise of the Coryton oil refinery comes as London edges closer towards producing its own green energy with a large wind farm in the Thames Estuary.

The London Array will eventually produce enough energy to power a quarter of London’s homes and the first phase of the project is nearing completing. The £1.7bn wind farm will be the world’s biggest when it is complete and will begin supplying energy to the National Grid early next year.

Phase one of the project sees 175 turbines generating 630 megawatts of power, enough to power 470,000 homes. The total number of turbines will be boosted to 217 in the second phase and provide 1,000 megawatts of power to serve 750,000 homes.

The power generated from wind turbines is expensive though, at £140 per megawatt hour, but UK Power’s Jacob Duursma does not believe it will impact on the overall price consumers pay to suppliers.

London’s shift towards wind turbines is an interesting one, Duursma says, because many countries are now looking at how to solve their long-term energy issues.

“There is a lot of questions about where our energy will come from,” said Duursma. “There is a debate on nuclear energy in Germany, who have committed to go nuclear free, which will have an impact on the fuel mix of the country as a whole.

“For the UK, there is no clear answer on what should be our mix and how dependent on imports we should be, but there have been a number of bids for building nuclear power plants.”

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