SSE is to invest £15 million at its Peterhead power station but will shut down two coal-fired plants in England and Wales to meet EU rules on harmful emissions.
The company said the investment at Peterhead would allow the plant to operate more flexibly.
But the Perth-based firm will close the remaining units at its sites at Ferrybridge in Yorkshire and Uskmouth in Wales by the end of 2023 to comply with the industrial emissions directive (IED) which will come into effect in 2016.
The closures come on top of a loss of 2,000 megawatts of SSE’s thermal power generation capacity by end-March 2014, which the utility announced earlier this year.
SSE’s managing director of generation, Paul Smith, said there were “many uncertainties surrounding the future operation of generation assets in the UK”.
He added: “SSE’s primary objective for its generation business is to maintain a diverse portfolio of assets that help keep the lights on.”
The investment at Peterhead will see upgrades to steam turbines and control systems and is expected to be completed by the end of 2015.
It will give the facility the option to take part in new capacity auctions being introduced as a back up as more renewable energy comes on to the electricity grid.
The IED, which will come into effect in 2016, imposes limits on emissions of climate-harming gases.
Power plant owners have to decide before the start of 2014 whether to fit their stations with technology that allows them to comply or to shut down plants.