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Public Pays Wind Farms £170m A Year To Switch Off

August 17, 2019

By Paul Homewood

 

From the Telegraph:

 

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British householders were forced to foot a £173 million bill to compensate wind farms ordered to reduce the power they provided the country during the last financial year, The Telegraph can reveal.

As part of a National Grid system of so-called “constraint payments”, electricity generators receive generous compensation payouts when told to cut output as the network tries to balance the UK’s power supply.

While this is often done to ensure electricity supply meets demands, it can also happen when wind farms are being battered by high winds and consequently create too much energy.

The Telegraph revealed yesterday that the offshore Hornsea Wind Farm was given £100,000 to reduce power it supplied in the days immediately after it was linked – along with a gas fired power station – to a once-in-a-decade power outage. Details of exactly why it received these payments have not been revealed, but National Grid and Orsted – the plant’s owner – insisted it was not linked to the earlier blackout.

National Grid, a FTSE 100 company, insists these “constraint payments” keep consumers’ bills down, in part because they do not have to buy more infrastructure to store or transport any excess power.

The compensation cost, much of which is clawed back from domestic energy companies, is then invariably passed down to consumer and business bills.

Energy experts predict these payouts to renewable energy generators could soar “exponentially” as the country relies increasingly on wind power plants.

Ben Guest, a specialist in renewable energy companies and markets at asset management firm Gresham House, said compensation could even rise to £1 billion a year – nearly six times last year’s payout – in the foreseeable future.

“The amount of power delivered by renewables in the coming years is going to result in far larger amounts of over-supply than you see today,” he said.

It is anticipated that power generated by renewable energy could increase by up to 50 per cent over the next five to ten years as more wind farms are established, many set up to take advantage of generous government subsidies.

The stark warning came after it emerged the Hornsea plant in the North Sea suffered a “technical fault” and Little Barford gas fired station in Bedfordshire was struck by lightning last Friday contributing to the worst blackout in a decade.

National Grid yesterday handed Ofgem, the energy regulator, and ministers its initial findings into what caused that 5 per cent drop in power supply triggering a devastating power outage for more than one million homes and businesses, as well as disabling huge swathes of the rail and Tube networks, and leaving a hospital and airport without power. The report has not been made public.

According to National Grid’s own statistics, compensation payments to wind farms peaked in September, October and March of the last financial year, when monthly payments hovered around £30 million a month, way more than the average monthly £10 million.

Explaining why these payments can soar, Tom Edwards, of energy consultant Cornwall Insight, said: “The issue is with the network, and in particular getting the electricity from where is generated to where it is needed.

“National Grid has plans to improve the network between Scotland and England but it will cost a lot of money and take time to build those links.”

A National Grid ESO spokesman said: “It’s our aim to keep costs as low as possible and therefore keep consumers energy bills down too. Constraint payments are complex but are the cheapest way of managing the GB electricity system.

“The alternative is building more infrastructure at a significant cost, meaning higher bills for consumers. We continuously weigh up the costs of constraint payments versus building more infrastructure, and to date, it has always been cheaper to use constraint payments within the existing balance of costs and resilience in the current UK regulatory framework”

https://www.telegraph.co.uk/news/2019/08/16/compensation-payouts-wind-farms-soar-telegraph-can-reveal/

30 Comments
  1. August 17, 2019 2:58 pm

    Reblogged this on Climate- Science.press.

  2. August 17, 2019 3:18 pm

    It’s utter madness on stilts. Heads should roll for those who allowed this system of constraint payments to be developed.

    These constraint payments always remind me of the “Not rearing pigs” letter to Milliband.
    https://www.funny-jokes.com/months/jokes_pigs.htm#Not_rearing_pigs_Business

    • August 17, 2019 5:48 pm

      Great analogy, Phillip. We hadn’t seen this before but have just used it in our most recent post on constraints, linking to this blog. Good to see the Telegraph highlighting constraints again. We’re still awaiting answers as to why the average price has shot up 59% in August. Anyone here know why?

      • August 17, 2019 6:55 pm

        Try looking at the REF articles on constraint payments. One old comment they made was “National Grid has little or no choice of which wind farms to constrain. This ‘over-a-barrel’ situation may be part of the reason why wind constraint prices are so high.”

        Go to https://www.ref.org.uk/ and search for ‘constraint payments’. REF has been looking into it for years.

      • bobn permalink
        August 17, 2019 11:33 pm

        I’m guessing the payments have gone up because its been very windy and quite sunny lately but demand is low – no heating, schools closed, holiday closures. So we pay for them to generate what we cant use.

    • Mike Jackson permalink
      August 17, 2019 7:24 pm

      I know I’m not the first to say this and I know it’s not the first time I’ve said it but the only sane policy — as far as the UK is concerned; other countries may well be different — is for all electricity generation and distribution at the 132kV level to be the responsibility of a single, preferably nationally-owned, entity (call it the Central Electricity Generating Board, if you like!) with total control of the mix and not constrained more than is absolutely necessary by government policy.

      Electricity generation has become a licence, not so much to print money as to filch it out of the consumers’ pockets. The owners and operators of wind farms, and indeed most other means of generation, do not give a rat’s ass for climate or CO2 conservation or the environment. They have latched onto a money-making scam the likes of which has probably not been seen since the South Sea Bubble and are milking it for all it is worth, aided and abetted by virtue-signalling politicians with little understanding of the science they are being led to believe underpins their policies and even less inclination to learn.

      In that respect our leaders are not unique but a day of reckoning will come and the fall-out will not be pretty!

    • Harry Passfield permalink
      August 17, 2019 8:34 pm

      It’s rather like Hinckly Point becoming the next Chernobyl – and then asking for constraint payments because they couldn’t generate.

  3. Robert Fairless permalink
    August 17, 2019 3:19 pm

    Human beings devise this scheme: very stupid ones at that.

    • Harry Passfield permalink
      August 17, 2019 8:41 pm

      No, Robert, IMO, it’s Devised by people who want to enrich themselves, and to he’ll with the common man.

  4. Chris Reynolds permalink
    August 17, 2019 3:29 pm

    Surely the pitch control mechanism of a wind turbine should be capable of coping with high wind speed? I understand the turbine drive should also incorporate a braking system. If that is correct, why cannot the output of windfarms be maintained at the appropriate level for the needs of the grid at any given time thus eliminating constraint payments?

    • It doesn't add up... permalink
      August 17, 2019 8:30 pm

      It’s not that the generation can’t be turned down or off altogether, it is that they get compensated when they are asked to do that, sometimes very handsomely, because their contracts allow them to do claim.

  5. August 17, 2019 4:25 pm

    Reblogged this on ajmarciniak and commented:
    British householders were forced to foot a £173 million bill to compensate wind farms ordered to reduce the power they provided the country during the last financial year, The Telegraph can reveal.

    As part of a National Grid system of so-called “constraint payments”, electricity generators receive generous compensation payouts when told to cut output as the network tries to balance the UK’s power supply.

  6. August 17, 2019 4:25 pm

    “The amount of power delivered by renewables in the coming years is going to result in far larger amounts of over-supply than you see today,” he said.

    If constraint costs are going to keep rising into the hundreds of millions, it’s going to be cheaper to pay for some batteries and charge them instead of shutting off and claiming handouts. The fact is that the wind farms are here and aren’t going away, even though we don’t like it.

    • Mack permalink
      August 17, 2019 6:08 pm

      Don’t be so gloomy Oldbrew! Wind farms don’t have to be here to stay, certainly not as a means of providing grid scale energy. It only needs a government of grown ups to realise that 18th Century technology with a preferential route to market is not the answer to 21st Century energy requirements and legislate accordingly. Ditto, constraint payments. If wind farms were legally required to supply a set level of power to the market and had to compensate the grid (i.e. the bill payer) for the becalmed periods when back up has to come from alternative sources (predominantly fossil fuelled), then wind farms would go out of business tomorrow. Simples. But, is there a western government with the balls to take the necessary action? Not quite yet, it seems, but I think it’s only a matter of time.

  7. Stonyground permalink
    August 17, 2019 4:59 pm

    I’m beginning to think that the proliferation of wind turbines is on the same level of insanity as burning woodchips at Drax. These kinds of problems were happening in Australia before they happened here so the problems were known about. Our stupid pollies blundered on and built more and more of the stupid things anyway.

  8. Gerry, England permalink
    August 17, 2019 8:03 pm

    Little Barford struck by lightning? Really? How convenient. Being totally cynical and expecting the government and National Grid to lie, why would Bloomberg have reported RWE as saying that the Little Barford was shutdown due to contract and did not fail? Have RWE decided to lie as well to protect their relationship with the government by not showing up their policy as flawed?

    It seems the solar road in Normandy is not doing too well. It is breaking up, generates hardly any power and is so noisy that the speed limit has been reduced to keep it quieter. So much for the future.

    • It doesn't add up... permalink
      August 17, 2019 8:26 pm

      I’ve explained why that story got out – it was the German PR department not knowing who to contact for the real story in England, and being given a “I must say something” response from someone who didn’t know.

      I’ve also looked at Little Barford’s operations over the period 1-10 August. During the daytime it mostly was run at close to full capacity, with a gentle curve that reflects the peak of solar generation. It was being reduced to half output overnight after 11 p.m. before ramping back up again at 6 a.m. in the morning. Those changes in output didn’t exceed 13 MW/minute, taking over an hour to go from full output to zero. When the trip occurred, they went from 664MW to zero inside a second.

      I’ve also looked at the historical record of lightning at the time of the power cuts. There was definitely a sparky storm in the area of Little Barford at the time, and another one somewhat to the North that could have affected the major transmission line.

      If there are questions about lying, I think they will rest with Hornsea, who delayed nearly half and hour in completing their outage report to the official REMIT system, and then lied about the outage timing by at least 7 minutes. It is possible that National Grid asked them to lie to protect its own position. A good inquiry would cover these points.

    • Graham Nicholls permalink
      August 18, 2019 10:38 pm

      Constraint payments have been around for years and applied to fossil fuel generators before wind came along.. Additionally gas generators are receiving payments to stay on standby in case they’re needed. Nuclear receives massive subsidies and will do for centuries, including paying subsidies for French nuclear power imports. The subsidy system needs to be revised so that storage of electricity is paid for by any subsidies received.

      • Nial permalink
        August 20, 2019 8:55 am

        “Constraint payments have been around for years and applied to fossil fuel generators before wind came along”

        Graham, you’ve forgotten to point out that ‘constraint’ payments to conventional power sources are for them to turn ON unexpectedly.

        It’s only ruinables that get paid to turn OFF.

  9. It doesn't add up... permalink
    August 17, 2019 8:11 pm

    A lot of these constraint payments are due to the frequent outages on the 2.25GW Westernlink HVDC from Hunterstone to Deeside that exports much of the surplus Scottish wind (and also helps keep the lights on in Scotland when the wind doesn’t blow). The most recent outage ran from 6th April to 3rd June. That’s the fourth outage since it started up in late 2017.

    More constraint payments will be because there is too little inertia on the grid of all the wind is allowed to produce at full output in windy conditions. August 9th shows what happens when there is insufficient inertia to handle a typical generation or transmission loss. It’s interesting to note that the grid managed to handle to loss of Westernlink HVDC on 6th April – but that will have been because it wasn’t very windy, so it wouldn’t have been carrying much of a load.

    • Harry Passfield permalink
      August 17, 2019 8:53 pm

      Money for old trope,

  10. Anemoi62 permalink
    August 18, 2019 7:34 am

    In the interest of balance shouldn’t this article also list the amounts paid to constrain gas and nuclear? Last time I checked they paid out three times more to constrain gas. Wind farms are the easiest source of power to constrain when compared to other energy sources. So when there is too much power going into the network it is often first choice for National Grid whose job it is to keep the network in balance. Sloppy journalism.

    • August 18, 2019 10:45 am

      Proof?

      The simple fact is that before we had intermittent renewables, there was little need to constrain because it was easy to plan for likely demand

      Wind power has changed the equation now, because it is so variable

      As you can see from the link below, constraint payments have risen from £5m in 2012 to £124m last year

      https://www.ref.org.uk/constraints/indextotals.php

    • Joe Public permalink
      August 18, 2019 12:37 pm

      “Last time I checked they paid out three times more to constrain gas.”

      Rubbish.

      Owners of Gas-fired generators receive no ‘Constraint Payment’.

      Renewables have priority access to market – they’re ALWAYS first-on-and-last-off.

      Gas generation (simply) modulates up/down to cope with wind & solar’s intermittency. That’s why gas generation is now indispensable.

      • Nial permalink
        August 20, 2019 8:57 am

        Joe, AIUI payments for conventional power sources to increase their supply quickly are also ‘constraint’ payments.

        The difference being this is to turn ON rather than OFF.

  11. grammarschoolman permalink
    August 18, 2019 11:52 am

    So why can’t they do the sensible thing and store the excess energy for use when they’re not producing any?

  12. Stephen Kelly permalink
    August 18, 2019 12:35 pm

    £170 million a year to switch these scam machines off permanently would be money well spent as i see it, think of the birds and bats it will save, shame about our politicians they are beyond redemption.

  13. Ian permalink
    August 18, 2019 9:34 pm

    Funny how we never see the mention of the grid paying millions to keep coal fired plants on standby and diesel generating subsides

    Not a lot of people know that it takes over an hour to put a coal fired plant online, and 45 minutes for gas… Making neither easy to follow a fluctuating load. The national grid paid 80 million to keep coal on standby and then if needed it is the most expensive short tedm

    • August 18, 2019 9:39 pm

      Don’t be so pathetic

      The only reason Capacity Market payments (which are not “subsidies”) were introduced was to provide standby for unreliable wind power, which could leave us with weeks on end with no power.

      Short term standby is a completely different kettle of fish, and before we introduced intermittent renewables it was easily covered by pumped storage and OCGT and other short term measures.

      The grid worked perfectly well before Ed Miliband got his hands on it and mandated worthless renewables.

      It is abundantly clear from your comment that you don’t have the slightest clue how the grid actually works.

      And please don’t use a fake email address in future, otherwise you will be spammed.

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