The owners of Eggborough Power Station have entered talks with a biomass firm to consider converting the plant to avoid its impending closure.
In early September it was announced that the north Yorkshire plant would close from March 2016 resulting in 240 job losses.
The owners said that a permanent shutdown was the only financially viable option because it would take £200m of additional funding over the next three years to keep the plant generating.
The project’s cancellation would mean a loss of around three quarters of a billion pounds of investment and 1,960 MegaWatts of generating capacity, which equates to 4 per cent of Britain's electricity.
However, biomass firm Active Energy Group (AEG) has been in conversation with Eggborough about extending the life of the plant through a cheap conversion solution that would also prevent the job losses.
AEG has signed a joint venture deal with US firm Biomass Energy Enhancements (BEE) to use their technology which is able to process biomass into a fuel that can be burned at traditional power stations.
Eggborough chief executive Neil O'Hara recently ruled out a costly Drax-style biomass conversion after being turned down for a government grant by Chancellor George Osborne.
AEG has said that their CoalSwitch product allows for the conversion at an insignificant cost to the owners.
The company’s chief Richard Spinks said the new technology allows coal plants to ‘plug and play’ without the traditional associated costs.
“Conversion costs are virtually nil and generally only required if the plant’s condition is dilapidated,” he said.
“Using AEG's CoalSwitch technology is dramatically cheaper than what Drax had to do. BEE's sustainable biomass product has handling and burning characteristics very similar to coal, so can be used as a direct easy to drop in replacement.”
Since biomass is deemed to be a "carbon neutral fuel”, it will reduce the power plant’s carbon footprint proportionately to the amount of biomass burned in lieu of coal.
This means that using a 20 per cent mix of the new fuel will directly reduce the carbon footprint of the plant by 20 per cent, allowing it to hit the EU’s 2020 carbon reduction target.
It is understood that the talks are ongoing and that an announcement should be made about the future of the plant by the middle of October.