Scotland's coal industry was given a major boost yesterday with the signing of a £700m contract to supply the Longannet power station.
The largest coal supply deal in Scotland will account for nearly half the four million tonne annual output of Scottish Coal. It is being linked to more than 100 new jobs in the mining industry, with supply from Ayrshire, Lanarkshire, Fife and Lothian.
For ScottishPower, which owns and runs Longannet in Fife, the five-year agreement means roughly one-third of its total coal supply will be sourced from Scotland.
This reduces its dependence on imports from Russia, South Africa and Colombia, where volatile energy markets are making supplies less reliable. The price of coal has doubled since last August.
The significant change that brings Scottish coal back into the picture for ScottishPower is the development of cleaner-burn technology at Longannet power station.
Supplying the equivalent of one-quarter of Scotland's power demand, its owners are soon to complete installation of a scrubbing technology that removes almost all sulphur emissions. Coal from Scottish open-cast and drift mines has between two and four times as much sulphur compared with imported coal.
The deal was announced yesterday as ScottishPower hosted a gathering of international investors in Stirling, intended to persuade them of its Spanish parent company's major plans for renewable energy.
Ignacio Galan, chairman of Iberdrola, met First Minister Alex Salmond at the event, and later said: "Through this agreement, ScottishPower is demonstrating its support for Scottish coal, offering important opportunities for Scottish jobs and the Scottish economy, while reinforcing our commitment to coal generation in Scotland."
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