Wind farms are being paid more than £1 million a week to switch off their turbines.
Latest industry figures show £53.1 million was handed out to green energy companies over the past 12 months for shutting down turbines. The money is paid by consumers through a subsidy added on to electricity bills.
The turbines have to be shut down at certain times because Britain’s electricity network is unable to cope with the power they produce. The wind farm owners then receive compensation payments for not producing electricity.
On average a wind farm that is paid to switch off earns about one third more than if it produced electricity and sold it to the National Grid.
The scale of the payments has ballooned in the past two years. In 2012, wind farms were paid £5.9 million to switch off. In 2014, those payments – known as constraint payments – had increased 10-fold to just over £53 million, according to the think-tank Renewable Energy Foundation (REF), which compiled the figures using official data. The true figure is likely to be much higher because not all payments are made public.
Over the past year, one wind farm – Whitelee – received more than £20 million for turning off its turbines. Whitelee, Britain’s largest onshore wind farm, with 215 turbines and situated just outside Glasgow, is owned by Scottish Power Renewables, a subsidiary of the Spanish energy giant Iberdrola.
The payments are highest in Scotland because electricity demand north of the border does not always match the amount of power produced by turbines and other energy sources. Cable networks to take the extra power south of the border are not completed.
As a result, National Grid has to pay the wind farm owners to stop generating to keep supply and demand balanced.
It is causing growing concern in Whitehall that payments are spiralling. A letter sent on Dec 17 by the energy watchdog Ofgem to Matthew Hancock, the energy minister, warns of a “significant overall increase” in future constraint costs.
The letter, published on Ofgem’s website and uncovered by The Sunday Telegraph, discloses that the “constraint costs” for 23 “large generation” projects – 20 of which are windfarms – totalled £69.4 million in the 12 months to March 31 2014 – more than treble the constraint cost of the previous year.
National Grid has revised its estimates for constraint costs, to a total of more than £400 million over the next six years. In the letter, Ofgem’s Michael Crouch wrote: “Since our last report in December 2013, National Grid has refined its modelling approach to estimating future constraint costs.
This combined with a larger than expected increase in the underlying numbers has resulted in a significant overall increase in its projections of constraint costs.”
Dr John Constable, the director of REF, said: “The reckless policy of wind farm construction in Scotland… has created an ongoing bonanza for wind farms, which are actually paid more per unit to stop generating than to generate.”
An Ofgem spokesman said: “National Grid’s costs for making these payments have increased as more renewable generators have connected to Britain’s networks before investment programmes have been completed to build new capacity.”
A Department of Energy and Climate Change spokesman said: “National Grid has been paying coal and gas generators – and others – to change their planned output well before wind farms joined the mix. The impact on energy bills is negligible.”
Maf Smith, Deputy Chief Executive of trade body RenewableUK, said: “National Grid’s latest figures show that the costs of varying the output of gas are four times higher than the cost of constraining wind so far this financial year.
“Just to put these figures into their proper context, less than 3% of potential wind generation was called off by National Grid in 2014, which means that more than 97% was generated as planned. By using more of the cheapest form of renewable energy we have, onshore wind, we can actually drive down the cost of producing electricity and cut people’s bills”.
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