Scottish Power chief tells MSPs that UK grid connection charges put Longannet at risk

The UK Government’s energy policy is to blame for the threat of closure currently hanging over Longannet power station and for stifling energy investment in Scotland, the SNP claimed last night following a key evidence session at Holyrood’s Energy Committee.

The party said there was ‘further confirmation’ that the economic and regulatory energy framework is continuing to fail Scotland and stifle investment in new thermal generation in the evidence given by senior representatives from Scottish Power and OFGEM

Neil Clitheroe of Scottish Power outlined how the charges Longannet faced were disadvantaging Scotland and Martin Crouch, a Senior Partner at OFGEM, said that it was “less likely” that a new gas plant would be located in Scotland.

Douglas Chapman, the SNP’s Westminster candidate for Dunfermline and West Fife, said: “I was astonished that the message put out by Labour was that we should be anticipating closure at the end of the month. Nothing could be further from the truth.

“This power plant must remain open for a variety of reasons including jobs, security of supply and quality of supply in the years ahead and for the wider Scottish economy.”

“Expert witnesses have confirmed that transmission charges mean new thermal generation is unlikely be located in Scotland – and the blame for this lies at the door of the UK Government.

“The threat to Longannet and to the development of Scotland’s energy sector is directly related to transmission charges and this poses a major barrier to new power generation in Scotland.

“A 1,000 jobs at and in the supply chain for Longannet have been put at risk in large part due to transmission charges. The UK Government and National Grid have the power to resolve this situation and must now take action. 

“The security of Scotland’s future electricity supply and the jobs of the many people who work in the sector must not be put at risk by the continuation of this unfair practice.”

BOOKING NOW: Power Scotland Conference 19 March: Is our Energy Future Secure and Balanced? – http://goo.gl/X50kIS

The welcome address will be given by Professor Sir Jim McDonald – Principal and Vice-Chancellor of the University of Strathclyde, followed by the opening address from Murdo Fraser, MSP, Convenor, Energy and Enterprise Committee, Scottish Parliament. The Keynote Speaker is Alistair Buchanan CBE Chairman, Power & Utilities Practice, KPMG, and the closing address is by Tom Greatrex, MP, the Shadow Energy Minister.

COMMENT: A Mexican stand-off on the Forth

Scottish Power and the National Grid are in a Mexican stand-off – made in Westminster by OFGEM, whose grand offices are just along the road from the ‘mother’ of parliaments. Unless someone blinks first – by changing the rules that impose higher grid connection charges the further away the power generator is based from London and SEUK (South East UK) – the coal-fired Longannet thermal power station will close. The only question is when it will close.

Closing it later this month, or next, will ignite a fearsome political row in the run-up to the British general election in May which would be likely to repeat some of the for/against issues from Scotland’s Independence Referendum last year.

Closing Longannet after the British general election in Autumn 2015 will only stoke the political fire for the SNP in what will shortly become a Scottish general election year. There may be a ‘joker’ political reprieve for Longannet if – as is predicted by current opinion polls – the Salmond-Sturgeon-led SNP is ‘king-maker’ in a possible UK government coalition on May 8.

In neither case can the finger of blame by pointed at the door of Scottish Power. It operates in the free market and –rightly – responds to free market signals. These signals are saying – very clearly – that Scottish Power couldn’t burn through any more money than if it threw bucketloads of Scottish fivers into the furnaces at Longannet than if it tried to sell its coal-fired electricity to the national grid.