THE Scottish Energy Minister has vowed to continue negotiations with the UK Government on “much stronger consideration” over the future of Peterhead Power Station.
In a letter to Banff and Buchan candidate Dr Eilidh Whiteford, Paul Wheelhouse said negotiations between the two governments were now providing a “strong platform” to push for further recognition from politicians and the National Grid.
It comes as Peterhead Power Station continues to face an uncertain future after SSE decided to call a review earlier this year.
Plans for investment in Carbon Capture Storage (CCS) technology were axed in 2015 after the UK Government pulled £1billion in funding.
Meanwhile, transmission charges for Peterhead Power Station in the year ahead are an estimated £19.60 per kilowatt compared with a gas-fired power station in Kent which is expected to pay only £1.75.
Whiteford has worked tirelessly alongside the SNP’s Westminster spokesman Callum McCaig to call for a review into the matter as well as campaigning over unfair transmission charges.
In his letter, Wheelhouse said: “SSE’s review of the future options for Peterhead is a priority concern for the Scottish Government.
“As you note, Peterhead is Scotland’s only remaining large conventional thermal power station.
“The Scottish Government views flexible gas-fired generation as a natural complement to renewables as part of a balance energy mix and the Peterhead power station as a vital strategic asset for maintaining the resilience of our energy system.”
Meetings have been held both with the SSE’s finance director Gregor Alexander as well as well as UK Energy Minister Greg Clark.
Wheelhouse added: “I had a call with Gregor Alexander to discuss the review and the role for the Scottish Government in supporting a positive outcome.
“My understanding is that central to the review is the a process of sustained engagement between SSE and the National Grid.”
He said that while Peterhead had failed to secure a capacity market contract in the last four auctions, it has an existing voltage support contract with the National Grid, which runs until September this year.
“SSE is seeking other contractual arrangements with National Grid that would strengthen Peterhead’s economic outlook in the short to medium term.”
Wheelhouse said Alexander highlighted the significant challenge of paying comparatively higher transmission charges for using the high-voltage electricity network than other competing power stations do.
“Similar discussions now being held with the UK Government, provides a strong platform for the Scottish Government to push for recognition within the National Grid and the UK Government that strategic and regional factors merit much stronger consideration in current UK electricity markets and charging arrangements,” added Wheelhouse.
“This will include consideration of the role Peterhead and new efficient gas-fired generation in Scotland can play in supporting system resilience in Scotland in the near to long-term.
“The Scottish Government and its agencies will work closely with SSE as they undertake their review to explore options to secure a positive future for Peterhead and its workforce.”
Whiteford said that workers and their futures were being put in jeopardy by “unfair costs and indecision”.
“Investment in carbon capture and storage at Peterhead Power Station could have created dozens of jobs, safeguarded many more, and boosted the local economy, particularly at a time when the energy industry on a global scale has been suffering from a continued downturn, she added.
“The facility currently provides 90 jobs in the local area but the future for the station and its workforce is continually put in jeopardy by unfair costs and indecision. The SNP is the only party that has continued to push for answers and to protect Peterhead Power Station and is the only party who will fight to save it.”
Callum McCaig, SNP candidate for Aberdeen South, said: "To stay competitive in a global energy market we have to ensure investment is made in efficient, cutting edge technology like carbon capture storage (CCS).
"The Tory track record in government when it comes to industry is appalling, and never has their incompetence been more blatant than when they cancellation of the £1billion CCS competition.
"The best way to right this wrong is for the Conservative UK Government to use their overarching responsibility to ensure the right investment is made now. The Scottish Government has already made a clear commitment to energy in the North East of Scotland- it's time for the Conservatives to do the right thing."
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