Britain’s Wind Industry Set to Receive Even More Taxpayer’s Money For Producing Nothing At All

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So-called wind power ‘constraint payments’ are more like a kidnapper’s ransom, than a genuine commercial transaction. There aren’t many exchanges that involve a producer claiming a fee for producing absolutely nothing, at all.

But when your product is only available in random, chaotic spurts (or not at all), apparently the rules change.

Up to December 2019, British wind power outfits had collected over £650,000,000 for doing nothing at all; the cost to power consumers was almost £1bn over the last five years and that figure is expected to soar to over £500m a year, or even more.

Wind farms backed by green subsidies could be paid more to switch off
The Telegraph
Emma Gatten
28 January 2023

Wind farms backed by government subsidies could be paid more to switch off than to generate power, The Telegraph has learnt.

At particularly windy times, the National Grid pays producers to switch off rather than overload the local system, with the costs passed on to household energy bills.

Producers offer the price at which they are willing to switch off, which is normally around the market rate for electricity, currently at record highs because of the energy crisis.

Wind producers on newer government subsidy contracts are paid a fixed price, generally below current market rates, to generate electricity.

By switching off, producers may therefore be able to make rates well above their fixed prices.

Although the loophole only applies to about seven per cent of wind farmer producers on so-called “contracts for difference” (CfD) – the newer subsidy system – the issue could grow as new wind farms come online.

Developers of the newest wind farms have offered to produce power for a guaranteed price of as little as £37 per megawatt-hour (MWh).

That compares to wholesale electricity prices currently around £150/MWh, which are expected to stay at record-high levels for years to come.

Meanwhile, the National Grid forecast that levels of curtailment will grow fourfold in the next decade, from 3.8 terawatt-hours (TWh) in 2022 to 15TWh in 2030, with costs forecast to reach £2.5 billion a year

In 2022, consumers paid £215 million to turn wind farms off, and £717 million to buy gas-powered electricity to make up the difference, according to figures from the UK Wind Curtailment Monitor.

The Telegraph revealed this week that wind farms could be paid to switch off even at times when the National Grid is paying households to turn off their gadgets because of blackout fears.

However, Craig MacKinlay, a Tory MP and chairman of the Net Zero Scrutiny Group, said: “The fact that hundreds of millions of pounds are being paid annually to wind farms not to generate, with these costs added to consumer bills, is a national scandal.”

Mr MacKinlay said the issue highlighted that “the intermittency of renewables with gas having to be used as the reliable balancer means wind companies are reaping the cream but doing nothing to help energy security”.

He added: “BEIS [Department for Business, Energy and Industrial Strategy] lawyers who drafted these appalling contracts are responsible for billions of pounds of additional costs to consumers.

“The complexity of the energy system and its pricing is a direct result of distorting a functioning market on the altar of net zero.”

A government spokesman said: “The Government is currently undertaking a review of electricity market arrangements. Curtailment payments are used by the National Grid ESO, as well as in other nations around the world, to safely manage electricity supply on a day-to-day basis.”
The Telegraph

What a ‘safely’ managed electricity supply looks like in 2023.