Longannet under threat in Grid costs wrangle



By Newsnet Reporter

Scotland’s major coal-fired power station at Longannet in Fife faces uncertainty after its operator decided to abstain from bidding to feed the UK National Grid when licenses are renewed in 2018.

ScottishPower disclosed that it does not intend to bid to supply power into the Grid from Longannet, because of the massive charge differential faced by the Fife coal-fired plant compared to power stations in England.

Longannet, one of the biggest stations of its type in Europe, is at the centre of a dispute about the level of payments made to power generators across the UK. The station faces connection costs of £40m a year – nearly 10 times those facing some English power stations.

The new UK “Capacity Market” favours those generators with power stations that are close to the larger English cities, partly for environmental reasons but mainly because of the cost of building distribution capacity.

ScottishPower’s unexpected revelation reflects a behind the scenes wrangle the company is engaged in with the Department of Energy & Climate Chagne in London, the National Grid and the Scottish Government.

It is likely that the company will seek some form of subsidy in order to keep Longannet connected to the Grid for as long as possible. The station, which has had a lot of recent investment but still remains a significant polluter, burns mainly imported coal.

The National Grid claims that it continues to discuss the situation with the UK regulator Ofgem, and that Scottish charges to join the Grid will fall by 2016, but that seems too little, too late for ScottishPower and Longannet.

Scottish Energy Minister Fergus Ewing alleges discrimination against Scottish-based power generators.

“Scottish generators have 12% of the generation capacity but 35% of the costs. They are paying three times as much as they should in an allegedly United Kingdom,” said Ewing.

Scottish Power was notably quiet during the heated referendum campaign. Todays statement makes it likely that the company’s lobbying about the future of Longannet is soon to intensify.