When confronted with the scandalous cost of constraint payments to windfarms when their generation is surplus to requirement, the wind industry correctly points out that all generation technologies are constrained off from time to time and are all compensated for their losses by National Grid (NG). This is a brief explanation why wind generation constraint payments are not the same as other generation constraint payments. National Grid (NG) balances supply and demand for electrical power. NG does the fine tuning second by second by asking for more or less generation and either paying for it or compensating for a generator’s lost sale of electricity when it is asked to shut down.
Constrained-off oil, coal or gas generators then give NG a rebate for the saving on fuel. Constrained-off wind generators lose the sale of electricity but also lose their subsidy worth about as much again as the cost of the electricity and need to be compensated for this loss. However, that makes wind about twice as expensive as other technologies to constrain off and NG also has to balance its books so NG never chooses voluntarily to constrain off wind for routine balancing of the grid. In practice, wind is only constrained off if NG has to deal with an excess of generation and has exhausted all cheaper options.
This puts the wind generators in a very favourable negotiating position because NG cannot allow excess wind generation to destabilise the system. The outcome is always a payment to the wind generator well in excess of his losses. This form of doing business is normally referred to as ransom or blackmail, but it is legitimate. Note that when oil coal or gas is constrained off because of rising wind, we pay for these constraint costs as well as the twice-as-expensive wind generated electricity.
The Larches, Laggan Bridge, Newtonmore.