UK utility ScottishPower confirmed on Tuesday it will close its Longannet coal-fired power plant at the end of March 2016, citing a combination of high carbon prices and transmission fees.

The Iberdrola-owned company, which had first flagged plans to close 46-year-old Longannet in March when it lost a contract to provide grid balancing services.

It also said it would end development of a new gas-fired plant at Cockenzie for the same reason. Current UK rules mean Scottish utilities pay more than those in England to transmit power to the south of the country.

UK power plants must buy all their requirement of carbon allowances to match their emissions in the EU ETS and are also subject to the UK’s carbon floor price, which is frozen at £18 (€25.60) per tonne of CO2 to 2020.

Longannet surrendered 9.2 million EUAs to cover its emissions in 2014, EU data shows, meaning the closure of the plant will substantially cut Scottish Power’s carbon demand from next year.

By Ben Garside – ben@carbon-pulse.com