Tim Webb, The Times 18th January 2012
Last updated January 18 2012 12:01AM
Wind farms are receiving millions of pounds to shut down when the weather is too windy, The Times has learnt.
Dozens of onshore facilities shared £25 million last year, a 13,733 per cent increase on 2010, after a particularly blustery year, according to the figures released by National Grid.
The payments to stop operating are made by National Grid because it cannot cope with the amount of power being fed on to the system when it is very windy. But experts and consumer groups have accused wind-farm operators of abusing the system by demanding excessive payments.
Ultimately, the cost of being shut down is passed on to households because National Grid charges energy suppliers, who add the levy to bills.
Wind farms already receive large subsidies from consumers because they cost more to operate than coal and gas plants but produce no carbon emissions.
In total last year National Grid paid operators to stop generating for 149,983 megawatt-hours, equivalent to 1.49 per cent of the total electricity generated by Britain’s wind farms. This is equivalent to one large onshore farm being paid to be switched off all year.
It is the first time that National Grid, a FTSE-100 company, has revealed how much it paid wind farms not to operate.
Many of the payments are made to onshore wind farms in remote places, like the Scottish Highlands, where the grid has not been properly upgraded. National Grid argues that it is usually cheaper to pay off wind farms on the occasions when they would be operating at full capacity than spending billions of pounds to strengthen these isolated parts of the grid.
On one of the windiest days in October last year, National Grid paid wind farms £1.6 million, or £361 per MW/h on average, about four times the price that operators would expect to sell their electricity, according to ENDS, the specialist environmental information provider.
Consumer Focus said that wind-farm operators should not be able to hold National Grid to ransom by demanding huge payments in return for not generating electricity.
Richard Hall, head of energy regulation, said: “If wind-farm generators are asked to cut production they will clearly expect some compensation. But to keep costs down for customers we believe this should be at a level which reflects the realistic value of the loss to the company, not an arbitrary level that the firms set themselves.”
Ofgem, the energy regulator, said that it had “long-standing concerns” about the level of payments.
Since 2007, the amount of these “constraint payments” to all power generators has doubled as the amount of renewables being built has risen. Wind farms receive a disproportionately high amount of these payments compared with coal and gas plants. The size of payments will soar further as Britain tries to meet its target of generating a third of its electricity from renewables, mostly wind farms, by 2020.
Phil Hare, vice-president for northwest Europe for Pöyry Management Consulting, the energy consultant, said: “If wind farms are receiving much more in constraint payments than they would if they sold the electricity, they are making a turn they shouldn’t be.
By 2020, because of all the wind farms which will be on the system, the ups and downs of power generation will be staggering and very hard to deal with.”