Steven Vass
Deputy Business Editor

NATIONAL Grid is in talks with Perth-based power group SSE over a special
electricity supply contract as anxiety mounts about Scottish network
capacity when Peterhead power station slashes output next year.

The UK’s grid controller is understood to be concerned that Scotland could
struggle to keep the lights on during a transition period of about 18
months starting next March, when SSE will cut capacity at Peterhead from
1180MW to 400MW.

As previously reported in these pages, Peterhead will not be able to run at
its new capacity until SSE has completed a £15 million upgrade scheduled to
finish in autumn 2015.

If it wants to run the station in the meantime it would have to buy permits
to operate at higher capacity from National Grid (NG), which is only likely
to be economical for the company during periods of peak UK electricity
demand, when power prices reach their highest point.

Outside these times, it is understood that NG is concerned there could be
periods when having Peterhead offline could still mean that there is not
enough power for Scotland. This follows the closure of Cockenzie power
station in East Lothian earlier this year.

Some of NG’s concerns are said to relate to the fact that a series of
network upgrades currently taking place have made the system less flexible
than usual.

But the operator also foresees a situation where demand could sometimes
exceed supply because there is either not enough wind to power Scotland’s
wind turbines or too little rainfall for hydroelectricity.

If Peterhead is offline, Scotland would have around 4.8GW of ­capacity from
thermal and nuclear power, plus around 1.3GW from hydro and 4.5GW of wind
power. Peak demand is around 6GW.

The move is part of a package of wider efforts that NG is undertaking in
the face of capacity concerns around the UK.

Earlier this month the grid controller announced that it may ask businesses
to cut power ­consumption next winter between 4pm and 8pm at an expected
cost to consumers of over £20m.

It has also made clear that it will pay generation companies to bring
mothballed plants online to cope with peak demand.

A spokeswoman for NG said: “Discussions we have with all of our customers
are confidential.”

SSE declined to comment.

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