PETERHEAD power station is to slash its electricity capacity by two-thirds from next year, raising difficult questions for the Scottish Government about the security of supply in an independent Scotland.

From next March, Perth-based utility SSE will cut the Aberdeenshire gas-fired station's capacity from 1.1GW back to just 400MW – smaller than the largest wind farms. It is blaming the uncertainty around reforms to the UK electricity market and a transmission charging system that disadvantages stations further north – the same reason that prompted a previous reduction from 1.8GW three years ago. Equally important to its decision is likely to be the high gas price.

Together with Scottish Power's recent closure of Cockenzie power station in East Lothian, the plan means that Scotland will have more capacity from renewable electricity than from fossil-fuel-powered stations for the first time, at 5.7GW and 5.4GW respectively.

As part of a wider programme of SSE capacity reductions of more than 2.5GW, the company has written down the value of its stations by £278 million. Pro rata, this suggests that it has taken a hit of about £70m over Peterhead.

The SSE move comes while the "big six" electricity utilities have been lobbying the UK Government to support gas-fired power for fear of power cuts in the coming years, largely due to coal-fired station closures and wind power only being available when wind conditions are favourable. Energy UK, the industry association, wrote to Westminster Energy Secretary Ed Davey last week saying clarification of the role of gas-fired power for the future was "urgently needed".

Scottish Labour energy spokeswoman Rhoda Grant said: "The SNP are looking to almost bankroll independence on the back of energy, but even an independent Scotland couldn't force companies to generate electricity.

"It just shows how precarious it is to build your economy on things that are not within your gift."

The Peterhead cut, which was quietly announced several months ago but went largely unnoticed at the time, is embarrassing for energy watchdog Ofgem, which recently proposed a new transmission charging system that would narrow the disadvantage felt by northern power stations. Evidently it is not enough to satisfy SSE.

The company is insisting the cutback will neither affect jobs nor the power station's chances of winning the UK Government's £1 billion competition to build a carbon capture and storage demonstrator. Peterhead was recently announced to be one of the last two remaining entrants to the contest.

SSE also stressed that the main effect of its proposal was to release the company from a multi-million-pound transmission entry capacity contract, which could be reversed if the market for gas-fired power became more lucrative.

Dave Watson, Scottish organiser of trades union Unison, said that Peterhead was "pretty vital" to the Scottish system.

"The more you rely on intermittent renewables, the more important the station becomes," he said. "Ofgem's new proposed system of transmission charges will be better than before, but it doesn't mean companies like SSE are happy. It's still not doing all the things that they would want it to do. They still feel Ofgem hasn't moved from its basic ideology that power should be generated nearer the market."

Holyrood Energy Minister Fergus Ewing said that SSE's decision was "yet another warning bell to the UK Government over the uncertainties being caused by delays to electricity market reform".

He added: "It also shows again the impact of high transmission charges on generators in Scotland. This can and must be addressed. We look to Ofgem's review of transmission charging in 'Project Transmit' to deliver a charging regime able to encourage electricity generation in Scotland to help ensure security of electricity supplies.

"This is becoming even more important as Ofgem has repeatedly talked of the dangers of the lights going off because of the increasing lack of UK electricity generation capacity – forecasting, in their report last October, that by 2015 the UK will have electricity generation capacity only 4% more than its needs, highlighting the continued importance of Scotland's role as an energy exporter to the UK as a whole."