A NEW deal has secured a 12-month lease of life for Eggborough Power Station bringing an extra year of employment for 235 workers.

The power station, near Selby, was due to cease generation from March 31 this year with the loss of 262 jobs.

However bosses at Eggborough Power Ltd announced yesterday they have signed a contract to provide extra power capacity for the National Grid during the winter of 2016/17.

The Supplemental Balancing Reserve (SBR) contract covers 775MW of capacity to be delivered by two of Eggborough’s four units. It is designed to support National Grid in balancing the system in the event of insufficient capacity in the market to meet demand.

Selby and Ainsty MP Nigel Adams said: "I am delighted that Eggborough's new owners have accepted this new offer of a back-up contract.

"This will be a great comfort to those who thought they may be out of a job.

"I have been working with Eggborough and Government for some months to reach this conclusion.

"This is great news for our district and for the nation's power security.

"I strongly believe there is a long term future for Eggborough and will continue to fight Eggborough's case in Government."

Eggborough Power Ltd announced in September it had started consultation with its employees over plans to close the plant at the end of March, stating it was "financially unsustainable" to continue operating the plant as it needed to find around £200 million of addition funding over the next three years to continue generating power.

The 53-year-old power station has faced a turbulent two years after the risk of closure first arose in 2013 when plans to convert it from burning coal to biomass were dealt a shattering blow as the Government decided not to fund the conversion project.

However when Czech energy company Energetický a pr?myslový holding (EPH) agreed to buy Eggborough Power Station in November 2014, the future of the station appeared to be secured.

The sales of the 2GW coal-fired power station,which supplies about four per cent of electricity in the UK, equivalent to powering about three million homes, marked EPH’s first acquisition in, and entry into, the UK market.

However in September last year the power plant’s owners revealed it had taken “the difficult decision over the potential cessation of power generation."

The SBR contracts from National Grid target generators which would otherwise be unavailable to the market, and would only be used as a last resort by the system operator after all commercial balancing actions have been taken.

Under the terms of the SBR contract, generators are required to remove contracted units from operating within the market for the full year and National Grid may dispatch them, as required, between November and February.

The first tender round for the provision of SBR during the winter of 2016/17 closed on November 30, after which Eggborough Power Ltd was offered a contract from National Grid.