SNP demands assurances over future of Peterhead Power Station

Peterhead Power Station - photo credit: Fred Coutts

SNP MPs Dr Eilidh Whiteford and Callum McCaig have demanded assurances from the UK Government over the future of Peterhead Power Station, telling Business Secretary Greg Clark that “it makes no sense for an existing gas plant to shut”.

Writing to Clark, the pair express concern over the UK Government’s decision to scrap its planned £1bn carbon capture and storage competition, with Peterhead one of the plants which had been in the running for the funding.

The warning follows a report from the National Audit Office which found the UK Government spent £100m on the competition before abandoning it.

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The letter says: “The current uncertainty surrounding Peterhead station is in part a damning legacy of your government’s decision to scrap £1 billion of support to carbon capture and storage, which was intended to create highly skilled jobs and stimulate large-scale investment to the area. The SNP will continue to condemn this counterproductive, reckless decision, and call on you to provide this sector with the support it needs and deserves.

“The continued operation of Peterhead power station is vital to retain jobs in the area, capture investment opportunities, and enhance Scotland’s energy production. At a time when the UK Government’s efforts to ensure the development of a new generation are proving unsuccessful and further closures of coal power plants are expected, it makes no sense for an existing gas plant to shut as a result of the iniquitous transmission charging regime. As such we call on you and your government to exhaust all options to safeguard the future of Peterhead power station.”

In its report last month, the NAO found the Department for Business, Energy & Industrial Strategy’s £100m spend on the second competition for government financial support for carbon capture storage did not achieve value for money.

The NAO reports that BEIS also spent £68m on the first competition on support for CCS, which it cancelled in 2011.

Releasing the report, Amyas Morse, head of the NAO, said: “The Department has now tried twice to kick start CCS in the UK, but there are still no examples of the technology working. There are undoubtedly challenges in getting CCS established, but the Department faced an uphill battle as a result of the way it ran the latest competition.

“Not being clear with HM Treasury about what the budget is from the start would hamper any project, and caused particular problems in this case where the upfront costs are likely to be high. The Department must learn lessons from this experience if it is to stand any chance of ensuring the first CCS plants are built in the near future.”