SSE to review future of Peterhead operation after failing to win capacity deal

SSE said it was reviewing the future of its Peterhead power station after it failed once again to secure any provision agreement in the latest capacity market option.

The power firm said had provisionally secured agreements to provide a total of 4,451 megawatts of de-rated electricity generation capacity from October 2017 to September 2018 in the GB Capacity Market Auction.

The auction cleared at a price of £6.95 per kilowatt with SSE's provision valued at £30.9m.

However, SSE said Peterhead's location placed it at a disadvantage in the auction as it was required to pay “significantly higher transmission entry capacity costs than other power stations on the electricity system”.

“In light of these provisional auction results, the fact that Peterhead has failed to secure a contract in any of the three previous capacity market auctions, and other economic considerations, SSE will be reviewing future options for the station over the coming months and will engage with all stakeholders during this review. The review will not impact current operations at the station,” SSE said.

One unit at SSE's Fiddler's Ferry power station which is not fitted with flue gas desulphurisation plant, also failed to secure an agreement, the company said.

“As part of its ongoing dialogue SSE will engage with the UK Government about the results of the auction, and the potential implications for the design of future capacity market auctions,” SSE added.