Scottish Power plans to close Longannet power station next year

March 23 (Reuters) - Scottish Power, one of Britain's "big six" energy suppliers, said it plans to close its Longannet power station early next year after its bid for a crucial contract was rejected by the National Grid (LSE: NG.L - news) .

The company said it was "extremely disappointed" with National Grid's decision and that in all likelihood, it will be forced to announce the closure of the coal-fired power station by March 2016. (http://bit.ly/1BaL6Hj)

National Grid chose SSE (LSE: SSE.L - news) 's Peterhead gas plant to provide voltage support services to Britain's electricity system between April 2016 and September 2017, the grid operator said on Monday.

The Scottish Government said it will take forward urgent discussions with Scottish Power, Fife Council and the unions about Longannet power station. (http://bit.ly/1BJ1FsZ)

"It is vital therefore that these discussions also explore all possible options for averting the premature closure of the site, such as possible action to address discriminatory transmission charges...whether the restoration coal proposal - mentioned in the UK Budget - could help the station's economics", said Scottish Energy Minister Fergus Ewing.

Iberdrola-owned Scottish Power said the issue regarding punitive Transmission Charges has not changed and continues to negatively impact the future of the station.

Scottish Power says hefty transmission charges were imposed by National Grid on Scottish generators.

Earlier this month, the company was given a temporary selling ban for failing to clear a backlog of customer issues within a timeframe set by the regulator.

Britain's large energy suppliers face competition from smaller providers that are gaining market share. (Reporting by Shivam Srivastava in Bengaluru, editing by Andrew Hay)