Scottish Power was paid £107million for switching off its wind turbines during a three-year delay in completing an undersea cable project which was supposed to solve that very problem. The £1billion Western Link from Ayrshire to North Wales was specifically designed to prevent so-called “constraint payments” by allowing more Scottish green electricity to reach consumers in England.
Previously huge amounts of energy from Scotland’s wind farms became stuck in a bottleneck at the Border, resulting in operators being paid millions of pounds to shut down – and the cost being passed on to household bills. The new high voltage link, a joint venture between SP Energy Networks and National Grid, was commissioned in 2012 and the project was supposed to be completed by December 2015. However, a series of major problems delayed the start for two years and it then operated at a reduced capacity until last May when it was shut down again before finally coming online on October 16.
According to figures compiled by the Renewable Energy Foundation (REF), Scottish wind farm operators received £267million in constraint payments during that period.
Remarkably, ScottishPower Renewables – another division of the company which was partly responsible for delivering the Western Link – received £107million for switching off turbines at 14 of its 24 wind farms.
REF director Dr John Constable said: “It is not possible to say how much of these consumer costs could have been avoided if the interconnector had been built on time. And it is still too soon to say how effective the Link will be in reducing constraints.
“After all, since it came online fully on October 16 there have been Scottish constraints to the tune of £8.8million, which is a large sum in absolute terms. That cost compares to £16million, £7million and £14million in the same period for 2017, 2016 and 2015, so it seems reasonable to say that while the interconnector is reducing constraint costs it has not fixed the problem.”
He added: “There are two big questions here. Firstly, will National Grid and Scottish Power be fined for late delivery and the constraints that were not prevented? Secondly, and this for me is the really important one, is the cost of the interconnector significantly less than the constraint payments it is preventing?”
Almost half of the constraint payments – around £49million – paid to Scottish Power during the three year delay in opening the Western Link were for shutting down production at Whitelee in Renfrewshire, one of the world’s largest onshore wind farms.
In addition, Black Law in Lanarkshire, Harestanes in Roxburghshire and Arecleoch in Ayrshire were paid around £14million, £11million and £10million respectively for switching off their turbines.
Ofgem, the UK electricity regulator, said in May 2016 it would “consider options to prevent ScottishPower Transmission and National Grid Electricity Transmission from benefitting financially from project delays with a view to protecting consumers’ interests”.
A spokesman added: “The Western High-Voltage Direct Current Link is now operational and we are in the process of assessing whether the relevant parties took reasonable and efficient steps to mitigate the risk and impact of any delays.
“If relevant licence conditions have not been complied with then we may consider taking enforcement action, this could include financial penalties, redress payments or a combination of both.”
Glasgow-based Scottish Power is a wholly owned subsidiary of Spanish firm Iberdrola. Its retail arm supplies gas and electricity to 5.2million consumers in the UK, its transmission arm owns the electricity network in southern Scotland, Merseyside and North Wales and its generation arm owns wind farms, coal power stations and hydro schemes.
A spokesman said: “The Western Link, developed by National Grid and SP Energy Networks, was switched-on in December 2017 and is currently in operation. SP Energy Networks is the regulated part of our business and a completely separate entity from ScottishPower Renewables. National Grid, as system operator, manages the flow of electricity across the UK and the constraints process.”
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