SSE power station in regulator probe

Perth-based SSE is one of two energy providers at the centre of an investigation by market regulator Ofgem over the recovery of costs for grid services.

Ofgem is consulting on National Grid Plc’s request to recover the rising costs of two contracts that it agreed with SSE Plc and Drax Group Plc.

The contracts are worth £113 million and included Black Start services.

Under Black Start, certain generators start up and provide electricity to the transmission system without an external power supply.

Ofgem said it had set a cost target for National Grid for these services and that National Grid has spent significantly more money than the agreed target.

The cost of Black Start services, traditionally the preserve of Britain’s coal-fired generators, has grown as coal plants have closed and operating costs risen.

Ofgem must decide whether to grant National Grid’s request in part or in full.

National Grid agreed a grid services deal with SSE for its Fiddler’s Ferry power station in Widnes and Drax through a tender process, Ofgem said.

SSE extended the lifespan of its Fiddler’s Ferry coal-fired power station until at least March 31 2017 after securing a contract with National Grid to provide back-up power for winter 2016-17.

It previously said the plant would likely close this year.

A spokesperson for SSE said: “SSE’s tender reflected the costs associated with Fiddler’s Ferry providing the Black Start services required by National Grid.

“The competitive tender process is a matter for them.”

SSE’s one-year contract covers one of three available units at Fiddler’s Ferry, which employs 213 people. The other units remained online for SSE to enter the station’s capacity into market auctions.

The 45-year-old plant had made a loss for two years. It provides two gigawatts of power to the north-west of England, which is enough to supply about two million homes with electricity.

The UK Government said all coal-fired power plants would be closed by 2025 to lower carbon emissions from the electricity sector.

SSE’s Fiddler’s Ferry site in Widnes.