A long-term agreement has been reached to keep the Huntly power station’s Rankine units operational until 2035.This move aims to bolster the electricity system as more intermittent renewable energy sources like wind and solar are integrated, according to Genesis Energy.

The agreement builds upon a non-binding heads of agreement signed earlier this year and outlines the operational details of the proposal. A review by KPMG indicated that the Rankine units would be increasingly necessary in the 2030s as renewable generation expands.

The proposal is designed to mirror the Huntly firming options that Genesis introduced to the market last year. it includes a strategic fuel reserve to ensure security of supply and will allow the retiring Rankine capacity to remain available.

Biomass Fuel Exploration

“While the term sheet is non-binding, it demonstrates good faith and a clear commitment by the parties…”

Genesis is also exploring the use of biomass as a fuel source to gradually replace coal. Once the proposal is formalized, any remaining Rankine capacity will be offered to the broader market through additional Huntly firming options and hedge products.

“While the term sheet is non-binding, it demonstrates good faith and a clear commitment by the parties, as they progress to agree and execute long-form agreements,” Genesis said.

The agreement is slated to take effect on January 1, 2026.Genesis requires certainty by early November to finalize operational and compliance work,ensuring the Rankine units are ready for winter 2026 and maintaining the capacity of all three units.

Industry Reaction

The Major Electricity Users’ Group (MEUG) has welcomed the proclamation but emphasized the need for further measures to maintain a secure electricity supply. MEUG executive director Karen Boyes stated that they anticipate the involved parties will finalize the agreement before November to ensure the Rankine units are available during the winter of 2026.

MEUG has consistently advocated for maintaining sufficient flexible firming generation to mitigate risks associated with dry years and the increasing reliance on intermittent renewable energy sources. The group also awaits the release of a Government-commissioned review of electricity markets, which will assess whether current regulations and market design support economic growth and affordable electricity access.

MEUG also suggests that the Government should focus on single-party oversight of security of supply. “At present the obligation for security of supply of our electricity system is spread across multiple parties, with no clear line of accountability,” Boyes said.

“There must be one party in government or the electricity sector that is responsible for the oversight of security of supply across the entire system.”