UPDATED 22 November 2016: SEE POSTSCRIPT BELOW
On the 28th of October, Falk Renewables announced that its newest wind power station, Assell Valley Wind Farm in Ayrshire, had begun generating.
Two weeks later, on the 11th of November, Assell Valley wind farm had to reduce output on instruction from National Grid in order to cope with the on-going problem of Scottish wind farms generating surplus electricity which can neither be used in Scotland, because of low demand, nor exported to England because of the limited interconnector capacity between the two countries.
Assell Valley wind farm charged £76/MWh to reduce output, which is approximately twice the subsidy income foregone when the wind farm is constrained off. Further constraint bids from this wind farm were accepted on the 12th and 16th of November at the same price. At the time of this blog (21 November 2016) the total income from constraints to stop generating for this new wind farm amounted to just under £10,000.
Read more: New wind farm constrained off grid within days of opening
A reduction in the use of coal and a rise of gas for generating electricity has slashed the UK grid emissions factor to around 0.26 tonnes of CO2 per MWh. This has the economic consequence of increasing the subsidy cost of saving emissions through increased use of renewables. It now costs around £169 to save a tonne of CO2 through use of onshore wind, and £267 for offshore wind. This is 6-10 times the estimated cost of environmental damage caused by a tonne of emitted CO2 and demonstrates how expensive and ineffective the UK renewables policy is in abating greenhouse gas emissions.
Read more: The Increasing Cost of CO2 Emissions Reductions in the United Kingdom
Windy bank holidays, when wind power output is high but demand is low, can force National Grid to make significant constraint payments to wind farms, plus related payments to conventional generators, to cope with the surplus, unusable electricity generated by wind farms, usually because the windfarms are located behind a grid bottleneck.
2016 has proved to be the most expensive Easter holiday period to date for wind farm constraint payments, with a total of £3.7 million being shared between 39 wind farms.
In discussions of subsidies to renewables it is sometimes claimed that fossil fuels in the United Kingdom receive greater support. This misunderstanding arises from the confusion of two quite different things:
a) subsidies to investors in renewables which increase consumer costs
and
b) Lower VAT (5% not 20%) on gas and electricity used by domestic energy consumers, and tax breaks to oil and gas companies, both of which will reduce costs to consumers.
It is obviously misleading to treat these two effects as if they were similar in economic character. However, this is increasingly common, even amongst those who might be expected to understand these matters.
REF was the first organisation to draw attention to the excessive prices demanded by windpower to reduce output (constraint payments), and the resulting publicity is in part responsible for the fall in prices, though these are still, in our view, excessive.
The wind industry has responded to this criticism by attempting to confuse the public with claims that other generators are paid more to be constrained off. This is untrue, but unfortunately was made the central argument in a piece in the trade journal, Utility Week:
Read more: Constraint Payments: Misunderstandings and Misrepresentations
Following work on the high constraint payments made to Scottish wind power in April, and subsequent coverage in the press,1 REF has continued to monitor the situation in May and June. The Department of Energy & Climate Change had described the events in early April as “unusual”,2 and we were interested to determine whether this was in fact the case.