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6 October 2014, 05:48
Scotland's energy minister is calling for urgent talks with the UK Government over the future of Longannet power station.
It comes after it emerged on Friday that the station may be forced to close due to the high transmission charges it must pay to connect to the main grid network.
Operator Scottish Power said the station has to pay ''disproportionately high'' transmission charges compared to those in the south of England.
Ferugs Ewing MSP, Scotland's energy minister, is now seeking a meeting with UK Energy Secretary Ed Davey to discuss the issue.
The Scottish Government said it has campaigned for reform of the transmission charging regime for years, saying it penalises Scottish electricity generators compared to those in the south of England.
Longannet has to pay around £40 million a year to connect to the national grid due to its location.
Mr Ewing said: "UK energy policy and regulation has endangered security of supply, has damaged investment in renewable energy, and now threatens Longannet. During the referendum campaign the UK Government made much of the so-called benefits of the UK for energy policy but the reality on the ground is now plain for all to see.
"The UK Government has completely failed to manage the electricity system properly and unfortunately the consequences are now being felt. With a looming security of supply crisis, maintaining a charging regime that penalises Scotland's energy generators is of great concern and simply makes no sense.
"Scotland's largest power station, Longannet, has the potential to generate affordable, reliable power for years to come and yet it is being priced out of the market. We need an urgent rethink on policy for baseload capacity and reform of the UK transmission charging system, and I will be writing to UK Energy Secretary Ed Davey to seek an urgent meeting to discuss the future of Longannet and wider energy security.
"As well as electricity supply and grid stability I am also concerned about the jobs involved. Longannet employs around 260 full time staff as well as benefiting the wider economy via suppliers to the plant. For the sake of both the workforce and the security of our energy system we need urgent reform of the much discredited transmission charging regime and better policy to maintain the reliable capacity that Longannet provides. I hope the UK Government will at long last take this issue seriously.''
The Scottish Government said that Scottish generators account for around 12% of the capacity connected to Britain's high-voltage electricity network but pay around 35% of the charges.
Scottish Power announced on Friday that it has decided not to enter the Fife station into the UK Government's auction for the delivery of electricity generating capacity for the winter of 2018/19.
The current Transmission Charging mechanism is linked to the electricity generator's distance from the main centres of electricity demand and generation.
The charges applied against a power station to access the main grid network become increasingly higher based on the distance that the station is located from the UK's most densely populated areas in London and the South East.
Scottish Power said it will now ''fully explore'' all options to keep Longannet operational for as long as possible and will hold talks with the National Grid, Scottish Government and Department for Energy and Climate Change.
WWF Scotland director Lang Banks said: "While it appears transmission costs have triggered this specific decision by the company, news that Longannet might close in a few years' time shouldn't come as any great surprise. Even the Scottish Government have been working on the assumption Longannet would close by 2020.
"We need to see Scotland and the rest of the UK move toward an electricity system that is largely free of polluting coal-fired power stations. As well as being responsible for about one fifth of all Scotland's climate change emissions, Longannet is ageing and becoming increasingly expensive to run.
"Scotland already generates almost half its electricity needs from clean renewables. If we're serious about wanting to keep the lights on, cutting emissions, and creating new long-term jobs, then Scotland needs to keep on the renewable path.''
A Department of Energy and Climate Change spokesman said: "The future of Longannet is a commercial matter and Scottish Power has made it clear that they have no plans to close the plant.
"Energy transmission is something the UK Government takes very seriously and Scotland is set to benefit from critical investment of up to #6 billion between 2013-21, nearly 30% of total earmarked for upgrades across Britain.
"Ofgem has also approved a significant change that will reduce future charges in Scotland, which is planned to be introduced from April 2016.
"This is on top of the reductions consumers in remote regions of Scotland receive to offset higher transmission charges, with the costs spread across millions of UK billpayers.''