Longannet power station is likely to close early next year after failing to secure a crucial contract with the National Grid, operator ScottishPower has confirmed.
The troubled coal-fired plant in Fife was bidding for a short-term contract to help maintain voltage levels in the electricity supply from April 2016 to September 2017.
MSPs heard earlier this month that the station would close by the end of March next year unless it was successful in its bid.
Yesterday, National Grid announced that SSE’s gas-fired Peterhead power station has been chosen for the £15 million contract over Longannet and a third bidder.
Neil Clitheroe, chief executive of 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 plant has been under pressure from new European Union (EU) environmental legislation and carbon taxation combined with higher transmission charges to connect to the grid due to its location in Scotland.
National Grid said the proposal from Peterhead was the “most beneficial” across a number of factors including “system stability and resilience” and value for money.
The contract is to ensure stability in the system 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.
Scottish Government Energy Minister Fergus Ewing is to hold urgent talks with ScottishPower, Fife Council and unions about Longannet’s future.
Mr Ewing, who is set to make a statement to parliament tomorrow, said his thoughts were with the workers.
He said: “The news that Longannet is now likely to close prematurely is very concerning for the Scottish Government. We will look to engage all relevant authorities and agencies alongside ScottishPower to secure the best possible outcomes for those affected throughout the local economy and further afield.”
A Department of Energy and Climate Change spokesman said: “The awarded contract is good news for Peterhead, a plant that is developing CCS [carbon capture and storage] technology which will help towards our carbon emission objectives.”