MATT OLIVER
One of Britain’s biggest wind farms was handed £65m to slash its output by nearly three quarters last year, amid warnings that the country’s “staggeringly inefficient” power grid is pushing up household bills.
The Seagreen offshore wind farm in the North Sea – the largest of its kind in Scotland – had its output curtailed for 71pc of the time it was due to operate in 2024, grid data show.
This meant that of 4.7 terawatt hours of power its turbines generated, 3.3 terawatt hours were effectively discarded – with owner SSE paid by grid operators each time this happened.
SSE also owns the Viking wind farm in the Shetlands, which had 57pc of its output curtailed last year at a cost of £10m. It was only switched on in August.
The two sites have been paid another £1.5m so far this year for cutting output.
Grid operators pay wind farms to switch off when they are generating but there is not enough network capacity to transport their power.
But these curtailment payments ultimately go on to bills, in the form of network charges, and are paid by millions of households and businesses.
Last year, separate analysis by the Renewable Energy Foundation charity found that wind farms were paid almost £400m to turn off their turbines.
On Friday, SSE said grid upgrades were coming that would result in “more and more of this power flowing into the economy, powering homes and businesses for decades to come”.
A spokesman said: “Seagreen and Viking wind farms are incredible assets that give Britain the ability to harness huge volumes of its own clean, homegrown energy that can drive economic growth while reducing reliance on volatile imports.”
It came as the Government on Friday announced a slew of changes designed to attract more wind farm investment in the UK.
The proposals will make it easier for developers to secure contracts for difference (CfDs), the main mechanism used to support renewable energy schemes, and will extend their duration beyond the current 15 years.
But the figures will fuel a row that is raging in the energy industry over controversial proposals to introduce regional electricity pricing in the UK, replacing the current national price system.
Greg Jackson, the chief executive of Octopus Energy, compared the existing arrangement to “every region being forced to charge London house prices” and warned it would add £5bn to bills by the end of this decade.
Writing for The Telegraph, he said: “Britain suffers from a staggeringly inefficient market, reminiscent of the wine lakes and butter mountains of the old European Common Agricultural Policy.
“We are forced to pay wind farms billions each year to switch off and import energy from Europe when we have excess power we should be exporting.
“Without reform, energy costs will continue to rise and economic growth will remain elusive.”
His comments come after Alistair Phillips-Davies, the chief executive of SSE, warned that switching to regional electricity prices risked pushing up bills and derailing Ed Miliband’s plan for a clean power system by 2030.
He warned the reforms would cause unnecessary delays and uncertainty, spooking the investors that ministers want to invest in wind and solar farms across the country.
In an article for The Telegraph, Mr Phillips-Davies said: “The clean power prize is a golden economic opportunity for Britain that is achievable without this costly distraction – don’t blow it now.
Responding to these claims, however, Mr Jackson accused wind farm developers such as SSE of “scaremongering”.
He said: “If Government backs consumers over producers, corporates stand to forfeit easy profits – and will have to work harder.
“It is understandable they are deploying every threat in their arsenal to lobby politicians into inertia.”
A spokesman for the National Energy System Operator (Neso) said curtailment payments made up 2.4pc of a typical annual customer bill. Based on the current energy bill price cap of £1,738, this would amount to about £42 a year.
The spokesman added: “Neso takes its role to deliver a safe, secure and reliable national electricity network at least cost to consumers, extremely seriously.
“We make constraint payments when it is most cost-effective to temporarily reduce generation output in a specific area.
“We are constantly looking for new ways to reduce costs associated with balancing electricity supply and demand on a second-by-second basis, as these costs are passed on to consumers in their electricity bill.”
On Friday, the Government said it would boost wind farm investment by expanding the use of subsidies and making them more generous.
Under plans set out by Mr Miliband, the Energy Secretary, at least 43 gigawatts of offshore wind capacity is needed by 2030, compared to around 15 gigawatts installed today.
But ministers said they would boost investment by extending the terms of CfDs, relaxing rules around planning consent and allowing floating offshore wind schemes to benefit from “phased” support that allows them to be built in stages.
For the first time, CfDs will also be awarded to onshore wind farms that are being upgraded with more powerful, replacement turbines – known as “repowering” in industry jargon.
CfDs are used to give projects certainty about revenues by paying them a fixed price for electricity, meaning the Government [taxpayer] makes up the difference if wholesale prices go below this and developers repay anything above it. The contracts are ultimately funded by consumers, through their bills.
Full story: Yahoo Finance
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