Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner. Facebook Messenger An icon of the facebook messenger app logo. Facebook An icon of a facebook f logo. Facebook Messenger An icon of the Twitter app logo. LinkedIn An icon of the LinkedIn logo. WhatsApp Messenger An icon of the Whatsapp messenger app logo. Email An icon of an mail envelope. Copy link A decentered black square over a white square.

MSPs hear there are only weeks left to save Longannet power station

Jim Smith, Neil Clitheroe, Martin Crouch of Ofgem and Mike Calviou give evidence to the committee.
Jim Smith, Neil Clitheroe, Martin Crouch of Ofgem and Mike Calviou give evidence to the committee.

Longannet power station will close by the end of March next year unless it secures a short-term contract with the National Grid to help maintain voltage levels in the electricity supply, MSPs have heard.

Holyrood’s economy, energy and tourism committee was told that operator Scottish Power will know whether the Fife plant has a future within weeks.

Committee members heard that Peterhead power station is also currently facing “economically-challenging” circumstances.

Both plants, along with a third unnamed bidder, are currently competing for a National Grid contract to maintain voltage in the electricity supply from April 2016 to October 2017.

The contract is designed to ensure stability until the completion of projects to improve the electricity transmission system including the Western Link, a £1 billion project to help carry renewable energy from Scotland to Wales and England.

National Grid said it expected to make a decision on the contract by the end of March.

Neil Clitheroe, chief executive of retail and generation at Scottish Power, told the committee that Longannet was coming under pressure from new European Union environmental legislation and carbon taxation combined with higher transmission charges to connect to the grid due to its location in Scotland.

He said: “We’ve been pretty consistent since October when we didn’t enter the capacity mechanism that if something doesn’t change at Longannet then the likelihood of closure is very high.”

Mr Clitheroe said that Scottish Power would have to announce about a year in advance that it was giving up the transmission rights and in its tender to the National Grid had made it clear that “effectively that decision is now”.

Reading from a letter sent by the company, he said: “It’s important to note that in event of rejection of our offers we will be forced to announce as soon as is practicable the closure of Longannet power station by the end of March 2016 and we believe that the closure will have serious consequences on security of supply and on direct and indirect employment in the local community and beyond.”

He denied a suggestion from committee convener Murdo Fraser that the company was engaging in “brinkmanship” and using Longannet workers as “pawns in a game” to try and force National Grid’s hand.

“Our plan was always to get to 2020 and keep this plant going,” he said. “We’ve invested £350 million in the plant over the last six or seven years.

“It’s not brinkmanship at all, it’s just an economic reality of the situation we find ourselves in with regard to Longannet.”

Mike Calviou, director of transmission network service at the National Grid, said it was obliged by its licence to procure the most economic option that was in the best interests of consumers.

“That process we’re expecting to finish certainly by the end of March and hopefully in the next week or so,” he said.

Mr Clitheroe acknowledged that if Longannet were to win the bid it would only provide the plant with a year or two’s grace, adding “we are talking about when, not if”.

He said Scottish Power was doing everything it could to “try and bring the cost down and make the plant in a better situation” but, asked whether the company had any other “irons in the fire” in relation to Longannet’s future, he responded “not really, no”.

Mr Clitheroe said the prospect of a new gas-fired replacement for Longannet was “very, very unlikely given the difference in the economics between locating a gas plant in Scotland versus locating one in the south east of England.”

Scottish Power employs 270 staff at at the power station, with more jobs in the supply chain, and Mr Clitheroe said that in the worst-case scenario the company would seek to provide staff with a future elsewhere in the company or offer early retirement or voluntary severance.

Commenting on Peterhead power station, Jim Smith, managing director of energy portfolio management at SSE, said: “We have not said that Peterhead is going to close.

“We have said that it’s economically-challenging at the moment but we are, through a number of things, working to try and get through this particularly challenging period.

“We’re investing to make the plant more flexible for this winter coming through potentially winning ancillary service contracts.

“We hope to mitigate some of the losses that we’re seeing in the plant.”

He added: “Peterhead is a modern gas-fired power station, it’s got the capability to operate well beyond 2030.

“If CCS (carbon capture and storage) goes ahead, and of course there is the fact that at some point we would hope to see a market recovery in the wholesale market for thermal plant, then Peterhead could still have a long-term future in the Scottish generation market.”

MSPs were told that the third bidder for the National Grid contract was a new generator based in Scotland that was proposing an “innovative new idea”.

The panel was questioned on the security of Scotland’s electricity supply in the event of Longannet’s closure and beyond to 2025, by which point the Torness and Hunterston nuclear power stations are scheduled to close.

Mr Calviou said: “There’s no doubt there’s a lot of change potentially planned.

“I certainly know that EDF, I think, would be hoping to life-extend their nuclear plants so they might still be open in 2025, you don’t know.”

He said a number of other factors could come into play including further investment in generation and in the transmission network as well as developments in CCS.

SNP MSP Bruce Crawford asked what would happen to Scotland in the extreme event of a black start – the procedure to recover from a total or partial shutdown of the transmission system – without the station.

Mr Calviou said neither Longannet or Peterhead are contracted as black start stations but if neither was available to help it “probably would extend the time-scales” for getting Scotland back up from 12-18 hours to 24-hours plus.

He said that, traditionally, Scotland has been a large exporter to the rest of the network but a change was likely with the increase in wind generation north of the border.

“There will be periods clearly when the wind is not blowing in Scotland that we’ll increasingly start to see flows from England up into Scotland.”

The committee heard the current balance is around 90% flowing south and 10% north but that was expected to change in future with an increase in the amount flowing north, “albeit I still think it will still probably flow south the majority of the time,” Mr Calviou said.