Making good on earlier warnings, ScottishPower said on Aug. 18 that it has no choice but to retire the 2,400-MW Longannet power plant in March 2016 because high transmission charges and carbon taxes make fossil generation uneconomic in Scotland.
As with generators in the U.S., coal plants in the UK have been challenged by an unfavorable regulatory environment and subsidies for renewable energy. In Scotland, however, power plants bear an added burden from the national transmission system, which levies heavier charges on plants far from population centers in the south due to the distance their power must travel. Scottish Power had said earlier this year that the Longannet plant would probably close and be replaced with a gas-fired combined cycle plant, but it says now it will also abandon plans for the replacement.
According to a report in the Financial Times, ScottishPower has blamed the UK transmission regime for the closure, saying it discriminates against generation in Scotland. Longannet, it said, would have to pay £120 million in penalties to continue operating through 2018, while an identical plant near London would have received £4 million per year in payments.
Ofgem, the UK transmission regulator, said the scheme is designed to reflect the costs imposed on the system to move a plant’s generation to end users. The rules have contributed to the shutdown of several other plants located in unfavorable locations, such as the 2-GW Didcot A coal plant in Oxfordshire, which closed in 2013.
—Thomas W. Overton, JD is a POWER associate editor (@thomas_overton, @POWERmagazine).