ScottishPower has reached a three year agreement with ATH Resources, for the supply of 800,000 tonnes of coal. The deal is estimated to be worth in excess of £40m over the life of the contract.

The announcement comes as ScottishPower finalises the commissioning of Flue Gas Desulphisation (FGD) equipment at their Longannet power station in Fife.

Three 600MW units at Longannet have been fitted with FGD in a construction process that has lasted three years. The £170m project utilises seawater-based FGD technology to remove sulphur dioxide from the boiler flue gases. The installation of the technology enables ScottishPower to burn larger quantities of higher sulphur Scottish coal.

The majority of coal supplied through today's announcement will come from ATH's new surface mine facility at Muir Dean in Fife. Muir Dean opened in July 2008 and is expected to produce 500,000 tonnes of coal per annum and create over 100 jobs at full production.


Together with coal supply contracts with other Scottish producers, it is now estimated that by 2010 a third of ScottishPower's coal requirements will come from Scotland.

John Campbell, ScottishPower’s Director of Energy Wholesale, said: "This agreement reinforces ScottishPower’s support for coal produced in Scotland, offering important opportunities for Scottish jobs and the Scottish economy, while strengthening our commitment to coal generation in the Scotland.

"Coal is an essential part of our future energy mix and through advances in emission abatement technology, such as carbon capture and storage, it can provide efficient low-carbon and flexible support for renewable energy as well as reliable base-load generation for the UK."

Tom Allchurch, Chief Executive Officer of ATH Resources plc, said: "I am delighted to have reached our first agreement with Scottish Power for the long-term supply of Scottish produced coal for use in Scotland. We look forward to working with ScottishPower as we develop our working relationship over the next few years."

ScottishPower typically uses between 4 and 6 million tonnes of coal per annum at two coal-fired stations Longannet (2400 MW) in Fife and Cockenzie (1200MW) in East Lothian. Longannet is the second largest coal-fired station in the UK and generates the equivalent of over 25% of Scotland’s annual electricity demand.

A consortium led by ScottishPower is currently involved in the final stages of the UK Governments Carbon Capture and Storage competition.

(GK/JM)