SSE has decided to mothball a third of the natural gas withdrawal capacity at its Hornsea gas storage facility due to poor returns.
Hornsea, located in east Yorkshire, accounts for about five per cent of the total gas storage capacity in the UK, and 10 per cent of deliverability.
"SSE has identified that the costs of operating, maintaining and upgrading the older withdrawal plant at its Hornsea facility are not currently supported by market returns," the company said. It will mothball one-third of the withdrawal capacity of the site with effect from May 1.
A sister facility it operates at Aldbrough, in which Statoil has a one-third stake, will remain fully open, the group said. SSE's two-thirds share accounts for around a further 3per cent of UK storage capacity and 13per cent of deliverability.
It said operationally both sites had continued to meet customer needs during 2014/15 with availability 85per cent at Hornsea and 87per cent at Aldbrough.
SSE said a business-wide review, including the implications of this decision, would result in the loss of 12 jobs in gas storage.
The group also announced it has signed an agreement with GE Capital to sell the Langhope Rig wind farm near Hawick in the Scottish Borders. The deal will see ownership and operation of the 10 turbine 16-megawatt site transferred to GE when construction completes within a few weeks.
Paul Cooley, SSE's director of renewables said it was the latest step in a programme of acquisitions and disposals to optimise the wind farm portfolio. The proceeds from the sale of Langhope Rig would help to support investment in new renewable assets.
Under the agreement, the £5,000-per-megawatt community investment fund associated with the project will be transferred over to GE to manage and is therefore protected for the nearby communities hosting the wind farm.
Earlier this week it emerged that Longannet power station faces earlier than expected closure due to the award to SSE's Peterhead gas power station of a contract from National Grid.
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