MSPs Hear Longannet Closure Warning
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.''