It was Intergen's third UK power station after Rocksavage and Coryton. Intergen is based in Burlington, Massachusetts.

The electricity is supplied to Centrica under a 17-year deal agreed on 22 May 2002;[2][3] Centrica originally had 50% of the equity in the project in December 1999, and they supply the gas. It was the first power station to be project financed under the New Electricity Trading Arrangements in England and Wales, and funded by Barclays Capital.

InterGen today announced the financial close and funding of credit facilities for the combined cycle power station. Initial construction work has commenced and the plant is expected to be operational by the end of 2004.

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The latest step forward for Spalding Power Station has been welcomed locally.

Centrica plc has today announced that its wholly owned subsidiary, British Gas Trading Limited, has entered into an innovative energy tolling agreement to acquire rights to the total capacity of the 860 MW gas-fired power plant to be built in Spalding, Lincolnshire. This modern high-efficiency plant will use established technology and is designed to operate in a flexible, non base-load regime.

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Intergen is also looking to secure a long term buyer for power generated at the plants.

Mark Somerset, who heads up InterGen’s European business, said: “InterGen stands ready to deliver energy for the UK, provided Government delivers reform which attracts investment and gives our customers and ourselves the confidence we need.”

The plans to extend Spalding power station were passed by district planners in 2010, but were put on hold because of market conditions.

It is expected the two projects, totally £1billion, will create up to 3,000 jobs during construction with around 60 full-time jobs expected at each site when the stations are up and running.

InterGen is planning to expand its existing gas fired power station in Spalding by constructing and operating a new up to 945MW gas-fired facility known as the Spalding Energy Expansion.  It is proposed that the station will comprise a 645MW CCGT and an open cycle gas turbine unit of less than 300MW.  The expansion is on land adjacent to the existing power station and will generate enough electricity for approximately one million homes.

Intergen spokesman Alastair Lamond said: “We hope to know by the end of the year if we have a buyer for the energy – and we hope to have the project completed by 2018.”

But InterGen has called on the Government to push ahead with electricity market reform.

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Roy Gardner, Chief Executive of Centrica said: "We are delighted with this innovative agreement; it provides Centrica with increased flexibility to manage our growing customer demand, while leaving the construction and operating management with InterGen. We have the full flexibility of a modern purpose-built asset, on highly attractive terms, without tying up our own capital in the plant."

Siemens will construct and maintain up to 2.1GW of generation capacity at Spalding, Lincolnshire and Gateway, Essex, if Intergen decides the projects are bankable.

InterGen, which owns the existing station, says construction could commence in the fourth quarter of the 2015 financial year, if it is successful in securing a government subsidy. The government is due to confirm in July the next round of Capacity Market Contracts, which see energy companies take part in a reverse auction to secure retainer-style payments to ensure their power plants are available – even if they don’t actually end up generating. The auction is then expected in December.

The sites border on existing plants owned by Intergen and are supplied by gas and electricity transmission networks.

The latest move means all the pieces are now in place to go ahead with the project, although a spokesman said negotiations are now underway on the sale of the electricity the new power station would produce.

Clean-burning natural gas will be the fuel for the new plant and modern equipment and technology will be employed to control emissions, which will largely consist of water vapor and carbon dioxide. Gas-fired power stations do not emit odors from their processes and all aspects of the environmental performance will be monitored by the relevant authorities (including the Environment Agency).

The Spalding development, which was first proposed by InterGen in January 1996, was put on hold during the Government's 'stricter consents' policy on gas-fired plants, pending changes to the electricity market. The combined cycle gas turbine power station was subsequently given the green light by the Department of Trade and Industry in November 2000.

Mark Somerset, who heads up Intergen’s European business, said: "My message to government is to design a Capacity Mechanism which enables independent generators such as Intergen to finance projects such as these. We are at the front of the queue: a bankable design for the Capacity Mechanism will see these projects built, and prove that Electricity Market Reform really does make the difference in attracting new investment.”

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InterGen, which owns the current power station, has signed a deal with engineering giant Siemens to build and maintain the new gas-fired power plant.

Intergen Spalding

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Plans to double the size of Spalding’s power station have been delayed again – with summer 2017 being the earliest work is now likely to start.

Siemens will also build and maintain a similar project in Essex.

Work to double the size of Spalding’s power station could begin as early as next January.

A £500million project to double the size of Spalding’s power station has taken a big step forward.

“Energy security is vital for the future of the UK, and South Holland will be playing a major role in this.”

In May last year, Centrica acquired a 60 per cent share in Humber Power Limited, which owns and operates a 1260 MW gas-fuelled power plant in Stallingborough, Lincolnshire. In August Centrica also acquired the entire economic interest in two gas-fired power stations based in Peterborough and King's Lynn with a combined generation capacity of 705 MW. Together, these three stations currently supply 20 per cent of Centrica's peak electricity needs.

Intergen stressed the importance of the government’s proposed Capacity Market, through which generators will be paid to make sure there is a comfortable margin of spare capacity. It forms part of the Electricity Market Reform programme that is expected to get parliamentary approval by the end of 2013.

InterGen received  its Section 36 planning consent for the project from the Department of Energy and Climate Change in November 2010 and a revised consent in October 2015. The expansion project is carbon capture ready and targeted to be operational by 2020.

Centrica and InterGen have agreed commercial terms over an initial 17 year period under which Centrica acquires the total plant capacity rights for a combination of fixed and market-related tolling payments. This allows Centrica to source the gas and to flexibly dispatch the plant to manage its demand requirements whilst leaving operational responsibility with InterGen.

In addition to providing much-needed power for the UK, the expansion will bring several local benefits:

Construction began in March 2002. It opened in October 2004 at a cost of £425 million.[4]

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In conjunction with these tolling arrangements and consistent with Centrica's selective asset ownership strategy, Centrica has sold its 50 per cent equity interest to an InterGen affiliate, Spalding Holding Company BV, achieving a premium over its investment costs. This equity interest was acquired when the two parties entered into a joint venture development in December 1999.