Households are facing a huge hike in their energy bills after a record surge in subsidy payments to switch off Scottish wind farm turbines partly caused by them producing too much power, an analysis has found.
In the two months of this year, £69 million was paid out in constraint payments, according to research by the Renewable Energy Foundation which described it as an “extreme spike”.
This is four times greater than the previous most expensive January-February period on record, which was in 2016.
The money is given out as compensation to energy firms for turning off turbines when the network is unable to cope with the power they produce.
The payments which kicked in in 2010, come when wind power in Scotland exceeds local demand but cannot be exported to England due to insufficient grid infrastructure.
REF said the surge in payments was partly because of strong winds, which means farms are generating too much power.
It is also said it was because wider network reinforcement is “unable to keep pace with wind sector growth in Scotland where government continues to approve wind farms in spite of the constraints”.
Last year, the total paid was £130 million, which was at that point the largest to date and the REF say that 2020 is likely to be a record year. The payments are made by the National Grid but charged to consumers and added to electricity bills.
A high-voltage submarine power cable between Scotland and England was supposed to help to cut the figure by allowing energy to be exported south of the border and keeping the turbines on more regularly.
But Italian telecom systems firm Prysmian, which manufactured cables for the £1 billion Western Link project, said on January 10 that it had failed. It came back into operation on February 7 but it was the third failure in three years.
But REF said that after the link was repaired, constraint costs remained as high during the latter part of February as they were during the outage partly because of high winds.
National Grid paid Scottish wind farms to switch off while the cable has been out of action, leaving customers to foot a bill.
Dr John Constable, director of REF, said: “In spite of expenditure on grid reinforcement and new lines such as the Western Link, the electricity system is failing to keep up with the development of wind in Scotland, resulting in very high costs to consumers. Government both at Holyrood and Westminster must share the blame. Meanwhile, heads or tails, the energy companies win handsomely.”
The GMB trade union, has said that the payments are creating a “subsidy sandwich for a renewables industry” that is treating bill payers with contempt.
After the latest outage on the Western Link which connects Scottish wind farms via Hunterston to England and Wales the energy regulatory Ofgem launched an investigation into National Grid and ScottishPower, the Glasgow-based arm of Spain’s Iberdrola, over the subsea power cable’s delivery and operation.
The joint project, which was billed at the time as the world’s largest subsea interconnecting power cable, was originally due to be completed in late 2015 but electricity did not start flowing through until December 2017.
It started at less than full capacity in 2017 after problems during construction. The line has suffered six faults since then, taking it out of action for months at a time.
Ofgem said in January that it would “review the performance” of National Grid and ScottishPower and whether they breached their operating licences through the late completion of the scheme. The regulator said it would also “examine potential breaches relating to the operation of the cable”.
It has the power to fine them up to 10 per cent of their turnover.
The Western Link runs from Ayrshire to north Wales via a 239-mile subsea route to the Wirral peninsula and a 20-mile stretch underground. It is designed to carry 2.2 gigawatts of electricity, enough to power four million homes.
Prysmian handed the project to National Grid and Scottish Power late last year and has booked €165 million in provisions for repair costs and “contractual penalties”.
Ofgem said that National Grid and Scottish Power had been officially required to deliver the link by March 2017 but that it was made fully available only in December, before the latest fault.
Ofgem said opening of the investigation “does not imply that we have made any findings about noncompliance.”
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