A new contact win for Peterhead Power Station was yesterday hailed as good news for the north-east town – but it is also crushes hopes of a stay of execution for the Longannet plant in Fife.
Energy firm SSE said its gas-fired Peterhead site, already earmarked for a pioneering carbon capture and storage (CCS) project, had been awarded a National Grid deal to provide voltage support to the electricity grid.
It was chosen following a competitive tendering process.
Voltage control is the method National Grid uses to make sure the electricity system stays within set limits day-to-day and after any faults.
The £15million contract will run from April 2016 to September 2017.
Jim Smith, managing director of energy portfolio management, SSE, said: “This announcement is positive news for Peterhead.
“SSE has continually invested in the site since it opened in 1980 and we’re pleased Peterhead will continue to play an important role in ensuring National Grid can provide system stability and resilience going forward.”
The new contract allows National Grid to call on 385 megawatts (MW) of Peterhead’s 1,180MW capacity to provide voltage support.
Workers at coal-fired Longannet, on the north bank of the Firth of Forth, near Kincardine, hoped their plant could escape closure if operator ScottishPower succeeded with its bid, which was one of three.
Longannet now looks likely to close early next year.
Neil Clitheroe, chief executive of retail and generation, ScottishPower, said: “We are extremely disappointed with National Grid’s decision as ScottishPower submitted a competitive bid that reflected our commitment to protecting the immediate future of Longannet power station.
“In all likelihood, we will be forced to announce the closure of Longannet by March 2016.
“Everyone will appreciate that it is a concerning time for all our people and we will do everything in our power to manage the outcome of this process as best we can.”
Longannet has been under pressure from new European Union environmental legislation and carbon taxation combined with higher transmission charges to connect to the grid because of its location.
Mr Clitheroe said: “The issue regarding punitive transmission charges has not changed and this still negatively impacts the future of the station.”
The new contract is expected to provide stability in the electricity system until the completion of projects to improve transmission, including through the Western Link – a £1billion project to help carry renewable-energy from Scotland to Wales and England.
Mike Calviou, director of transmission network services at National Grid, said: “We recognised a need for voltage support in Scotland due to a gap between the potential closure of thermal plant and the completion of upgrades to the high-voltage transmission network.
“We shortlisted potential providers for this service and selected the provider that was best able to meet our requirements.”
A Department of Energy and Climate Change spokesman said: “The awarded contract is good news for Peterhead, a plant that is developing CCS technology (in a partnership with Shell) which will help towards our carbon emission objectives.”
Scottish Energy Minister Fergus Ewing is to hold urgent talks with ScottishPower, Fife Council and unions about Longannet’s future.