Initially operating as an oil-fired power station and later transitioning to fossil gas, the plant has also served as a site for experimental hydrogen generation capacity.

In 2016, the site became embroiled in a controversy surrounding a failed hydrogen and carbon capture and storage scheme with BP, which ultimately proved unsuccessful.

Designed by Robert Matthew Johnson Marshall & Partners,[4] construction began in May 1973, completed in 1978,[4] with one unit opening in 1980, and the other in 1982.

In the early 1990s the owners (Scottish Hydro Electric) entered into a contract with BP to burn sour gas from the Miller Field.

[5] These changes allowed for 1150 MWe of output to be delivered at 57% thermal efficiency compared with the plant's original 37%.

The installed capacity of Peterhead increased to 2407 MWe in November 2007 following a compressor and combustion control upgrade on GT11, 12 and 13 making it the largest power station in Scotland ahead of Longannet.

On 23 May 2007, BP pulled the plug[9] on the carbon capture idea after losing patience waiting for UK government approval, with concern over the long term storage capacity of the Miller Field.