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Scandal of secret wind farm subsidies  

Credit:  By Graham Grant, Home Affairs Editor | Scottish Daily Mail | 1 Oct 2012 ~~

Scotland’s wind farms have been ‘secretly’ paid nearly £20million to shut down before spells of stormy weather. Companies qualify for socalled ‘constraint payments’ when they have to temporarily close wind farms and these are bankrolled by householders through rising domestic energy bills.

In exceptionally windy conditions the creaking National Grid simply cannot cope with the extra energy that turbines produce. But the Scottish Daily Mail can reveal that the energy transmission network is arranging huge payouts ahead of very windy weather – and much more cash is involved than previously thought. It undermines Alex Salmond’s claims that wind energy can play a key role in helping Scotland to produce 100 per cent of its energy from ‘green’ sources by 2020. Last night, Scottish Tory MSP Murdo Fraser, said: ‘Why have the authorities been so anxious not to release this information?

‘Is it because they feared this would undermine any remaining public confidence in renewable energy policy? People will wonder if they were trying to cover up the truth.’

During two days of stormy weather last week, almost £400,000 was handed to firms that shut down wind farms – nearly all of it paid through secretive deals.

It means hard-pressed householders are paying energy giants not to produce power – but do not even have the right to know which companies are benefiting.

Compensation is paid if wind-generated electricity feeding the Grid is not required or has already caused an overload.

Until now, constraint payments have worked by compensating operators for lost energy following turbine shutdowns.

But under a more secretive system known as ‘forward trades’, the Grid decides a sum that will be paid out for a period when very windy conditions are expected. These payments are agreed before turbines are even shut down.

Unlike the more conventional payments details of the recipients are not published. Limited information about forward trade deals is published in an obscure section of the National Grid website – but in a format that even experts struggle to interpret. When pressed, the National Grid admitted that about £15.5million was paid out to energy operators in the form of conventional constraint payments in 2011-12.

But for the first time, it has emerged that £18.6million was paid in forward trades.

This suggests total constraint payments in 2011-12 of £34.1million – far greater than previously thought.

Although these cover all forms of power generation, the majority relate to wind energy, experts told the Mail. The figures cover Scotland and England but it is understood Scotland accounts for most, if not all, of the expenditure.

Payments of around £387,000 were made for storms last Monday and Tuesday.

Only £16,118 was paid out using the more transparent compensation system, with the rest paid through forward trades.

Dr Lee Moroney, of the Renewable Energy Foundation (REF), who uncovered the figures, said: ‘The electricity market needs to become far more transparent.

‘Wind farms are already heavily subsidised and it is only right that all payments made to reduce output are in the public domain so that consumers, who ultimately bear these costs, are able to judge if the charges are reasonable.’

National Grid spokesman Chris Mostyn, said it was ‘incentivised by the regulator Ofgem to keep the costs of balancing the network as low as possible’. He added: ‘We have a number of tools available to help us balance the network minute by minute and keep the lights on, and constraint payments are just one of those tools.

‘Our incentives are set by the regulator to operate the network as cost-effectively as possible, and it makes up less than 1 per cent of the average domestic bill. We are always working with the industry to improve and develop the way we operate the Grid, as well as investing millions of pounds in the coming years to help move the power to where it’s needed.’

Source:  By Graham Grant, Home Affairs Editor | Scottish Daily Mail | 1 Oct 2012

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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