Carlton Power to Develop UK Power Plant

British power station developer Carlton Power said on Thursday it had signed agreements to build a 1.8 gigawatt (GW) gas-fire power station and take over GE's stake in a planned 1.5 GW plant.

It aims to build the 1.8 GW power station at Trafford near Manchester in northern England and take a stake in a planned 1.5 GW project near Doncaster, also in the north.

"Carlton Power has appointed a consortium of (U.S. company)GE and two Spanish partners, Tecnicas Reunidas and Ferrovial Agroman, as its main engineering contractor," it said regarding the Trafford site.

"In addition, Carlton Power has purchased GE's interest in the 1,500 megawatt (MW) Thorpe Marsh gas-fired power station project near Doncaster which was consented by the Department of Energy & Climate Change (DECC) in 2011," it said.

Carlton Power said the agreements would "help pave the way for more than 2 billion pounds ($3.25 billion) of investment".

It expects both new power stations to become operational in 2018/2019.

As Britain's power stations are around 30 years old on average, their reliability and output is falling. Additionally, there has been a lack of investment into new capacity, resulting in warnings of potential power outages in coming years.

"New investment in UK gas generation has been enabled by the Capacity Market," said Mark Elborne, president and CEO of GE UK and Ireland.

The British government will hold its first auction for standby capacity on December 16 in a measure that will reward operators for holding power generation in back-up mode and make investment into new facilities more attractive.

Carlton Power said it would enter bids for the capacity auctions with both projects.

(1 US dollar = 0.6156 British pound)

(Reporting by Henning Gloystein; editing by Jason Neely)