Deputy First Minister John Swinney has called for reform of the UK’s “fundamentally flawed” transmission charging regime after it was announced that Longannet power station is likely to close early next year.
Operator Scottish Power said on Monday that the coal-fired plant in Fife will “in all likelihood” close by March 2016 after losing out on a short-term National Grid contract.
Neil Clitheroe, chief executive of Scottish Power retail and generation, said the current transmission charging regime was a “major barrier” to any future investment in thermal power generation in Scotland.
Mr Swinney said the £40 million of transmission charges Longannet pays to connect to the grid due to its location in Scotland were “punitive” and suggested that the National Grid system was “not fit for purpose”.
Speaking on BBC Radio Scotland’s Good Morning Scotland programme, he denied that a proliferation of windfarms was jeopardising the supply from such stations.
Mr Swinney said: “That’s a ridiculous charge. We’ve all got obligations to de-carbonise electricity and the Scottish Government is taking a balanced set of measures to expand our renewable energy generation.
“The problem at the heart of this is the transmission charges. If the transmission charging regime is fundamentally flawed, if it does not acknowledge the fact that there are valuable and worthwhile supplies of energy able to be contributed to the grid but its impossible to generate those because of the punitive transmission charges, then the National Grid system is not fit for purpose, and that is the core point that has to be addressed at the heart of this debate.
“Whichever way we look at this, whatever question we approach, we come back to the fundamental issue that there must be reform of the ridiculous transmission charging system that penalises electricity generation that is further away from centres of population.”
Mr Swinney said replacing Longannet with new gas-powered station was “certainly an option” but said that “no consideration” was being given by the Scottish Government to its nationalisation.
He added: “What we’re experiencing with the decision at Longannet … is decisions about energy policy being taken much earlier than are necessary because there is life left in Longannet, the plan was to maintain that power station to 2020 and, for the sake of the workforce, for the local community that will be severely affected by these changes, we think a more balanced decision should have been taken by National Grid which would have enabled Longannet to fulfil its working purpose until 2020.”
The Deputy First Minister raised concerns about the future security of the electricity supply with the closure of Longannet.
He said: “The UK is operating on a model that would see us essentially having 2% extra capacity in the forthcoming winter as a consequence of decisions that have been taken and we think that that is far too tight a margin to be operating in.
“If the UK Government is serious about guaranteeing security of energy supply across the UK then decisions like the one that was taken that had implications for Longannet yesterday are decisions that should not have been taken.”