National Grid’s voltage support contract was the final option left for the 2.4GW coal-fired plant to remain profitable against a backdrop of steep transmission charges leveled against generators north of the border.
But National Grid said on Monday morning that the contract has been extended to SSE’s Peterhead gas-fired power plant saying it is the plant “best able to meet our requirements”.
Scottish Power chief executive Neil Clitheroe said the company is “extremely disappointed” by National Grid’s snub, adding that “in all likelihood” it would be forced to announce the closure of Longannet by March 2016.
National Grid defended its decision saying it awarded the contract to Peterhead because its proposal was found to be the most beneficial in terms of its the ability to provide system stability and resilience, and value for money energy consumers.
While green groups praised National Grid’s support of a gas-fired power plant over that of a coal-fired plant, the Department of Energy and Climate Change welcomed the support for Peterhead which is advancing the government’s carbon capture and storage (CCS) ambitions.
The threat to Longannet’s future has become increasingly politicised ahead of the May general election with Scottish first minister and Scottish National Party leader Nicola Sturgeon calling directly on prime minister David Cameron to take “urgent action” to safeguard the plant.
In a statement the SNP said the transmission charges imposed by Westminster penalise Scottish electricity generators compared to generators in the south of England – “costing Longannet £40 million per year and putting the plant’s future in jeopardy.”
Clitheroe warned that the “punitive” charges would result not only in the closure of the Longannet plant but also create a major barrier to any future investment in flexible thermal power generation in Scotland.