The Fife plant, Scotland’s last coal-fired power station, had been expected
to shut down by 2020 but confirmation of its premature closure will come as
a huge blow.
There are around 430 permanent on-site employees, while around 100 small
businesses receive regular contracts from the power station, worth around
£10m per year. The plant was described as a “hub for the local economy” at
Holyrood earlier this month.
Scottish Power, which runs the plant, had hoped that it would have been
able to stay open for at least another two years if it had won a National
Grid contract to maintain voltage in the electricity supply.
However, it is understood that the SSE-run Peterhead power station has won
the deal, sealing Longannet’s fate.
The 40-year-old plant has become increasingly uneconomical in recent years,
as a result of stringent environmental taxes.
Scottish Power and the Scottish Government have also hit out at a
transmission charging regime which leaves Longannet facing huge costs to
hook up to the National Grid due to its location.
The firm will now give a year’s notice, as required by law, to take the
plant offline. It is hoped that some employees will be deployed elsewhere
in the company.
It is likely that as a result of the closure of Longannet, Scotland will
become increasingly reliant on importing energy from other parts of the UK.
Scottish Power believe that the transmission charging regime mean it is
uneconomical to build a new gas-powered plant, and will continue to lobby
the UK Government to overhaul the system.
A plant insider said: “This is a real blow, it’s been a huge part of the
landscape for years and is the second biggest coal plant in Britain and the
third-largest in Europe. But the truth is it just isn’t economical any
more, the contract that’s gone to SSE was its last hope.”
Neil Clitheroe, CEO ScottishPower Retail and Generation 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. As we have said previously,
today’s decision by National Grid means that, 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.
“The issue regarding punitive Transmission Charges has not changed, and
this still negatively impacts the future of the station. Beyond that, the
current Transmission Charging regime is a major barrier to any future
investment in flexible thermal power generation in Scotland. In any future
scenario for Scotland, it is vital that the network here is supported by
flexible generation to compliment renewables.”
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