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Western Link Outages Increase Consumer Costs for Scottish Wind Farms

REF wind farm constraint payment data was used on 12th of April 2019, in a Financial Times report on the most recent fault and outage at the new Western Link interconnector. In this post we explore some of the implications of the outage and offer some comments on its probable causes.

A renewable electricity policy based on wind and solar is a grid expansion policy; you can’t have a large fleet of uncontrollably fluctuating renewables in distributed and often remote locations without a cat's cradle of network to connect them and facilitate inter-regional and international exports and imports necessary as part of the demanding system balancing measures required of the System Operator. This fundamental association between wind turbines and wires has been clear for well over a decade, certainly since the now classic warnings of the Eon-Netz wind reports of 2004 and 2005.

But cables, whether subsea, underground, or in the air, are expensive, and add significantly to consumer costs. The Western Link interconnector, 2.25 GW High Voltage Direct Current cable consisting of 385km of subsea cable and 33km of onshore cabling, running from Hunterston in Scotland to Deeside in Wales, required a capital expenditure of somewhat over £1 billion.

WesternLinkMap

Figure 1: The route of the Western Link HVDC interconnector, Hunterson to Deeside. Source: Western Link

 The annual charges added to consumers’ electricity bills permitted by the regulator, Ofgem, to enable the interconnector’s owners to recover this capital and secure a return, are not public knowledge, but are likely to be about 5% of capex per annum, approximately £50 million, for 35 to 45 years. For the owners, National Grid and Scottish Power Transmission, this looks likely to be a gilt-edged investment.

Whether that regulated charge is also good value for the consumer remains to be seen. The Western Link was designed exclusively to provide a channel through which Scottish wind farms could export to English and Welsh consumers. Without that channel, consumers have to pay wind farms to stop generating when local demand within Scotland is insufficient to absorb the wind farm output. Since 2010 when these payments started, up to the present day (12 April 2019), these payments have totalled £562.5 million, with £124.6 million of that being paid in 2018 alone. Payments so far in 2019 amount to £52 million. For the short periods when the Western Link has been running since coming online at the end of 2017, two years late, the interconnector does seem to reduce constraint payments (see Figure 2 below), but no consistent picture is emerging because the Western Link itself has proved extremely unreliable.

The history can be summarised thus:

[1]  The interconnector was expected to be ready in late 2015, but did not go live until December 2017, two years late, and only then at half capacity.
[2]  It was expected to become fully operational in June 2018. However, the link experienced problems, and tripped soon after it was turned on after the repairs in May. It underwent further repairs, still with a target of commissioning in June.
[3]  During testing in June the Link tripped again, and it became clear that this was no minor teething problem. The company offered no predicted timetable for a return to service.
[4]  At the end of July 2018 Western Link announced that it would be operational in September.
[5]  On the 12th of September Western Link revealed that they had experienced another fault resulting in a trip and that consequently the September target would not be met.
[6]  On the 16th of October the Western Link returned to service, and worked apparently without incident until the 19th of February 2019 when it tripped again.
[7]  This fault was repaired in a month and the link re-opened on the 22nd of March. However, on the 6th of April the Western Link failed once more.
[8]  The company has revealed that the latest problem appears to affect a subsea section of the cable, some 150km from Hunterston.The company is predicting, perhaps optimistically, completion of repairs by the end of May.

All projects have teething problems, but two years late and five service failures in the initial phase of operation is beginning to suggest a systemic problem with the project. Unfortunately, due to a dearth of information in the public domain, analysts can do no more than speculate about the underlying causes. At present much of the attention is focused on the manufacturer of the cable, Prysmian, which has, as the FT story reports, said that its earnings may be reduced by €80 million because of the problems with the Western Link. Whether that means Prysmian is expecting to take sole responsibility is unclear, since its partner in the construction, Siemens has yet to issue a statement, and neither of the owners National Grid or Scottish Power Transmission is saying anything beyond the bare-bones statements on the Western Link website.

Clarity on this point is a matter of public interest, since the late delivery and the failures of the Link will have resulted in significant extra consumer costs, comprising a) Additional constraint payments to wind power to stop generating, as well as b) Payments to conventional generation south of the constraint to bring the system back into balance.

These latter payments can only be confidently identified by the System Operator, National Grid, but we can calculate the constraint payments paid to Scottish wind farms via the Balancing Mechanism during the periods when the interconnector should have been operational. The following table, uses outage information from the Western Link site and provides wind constraint payment data and constrained electrical energy volume data from the REF wind constraints archive.

Table 1: Western Link Service History, 2016–2019, with associated wind power constraint payments and volumes of electrical energy. Source: Western Link: REF constraint payment database, calculations from Balancing Mechanism Reporting Service (BMRS) data.

Key Start Date End Date Status Constraint cost (£m) Volume of energy constrained (GWh)
1 01/01/2016 07/12/2017 Late 168 2480
2 07/12/2017 15/03/2018 900MW 14 214
3 15/03/2018 04/05/2018 1125MW 11 158
4 04/05/2018 16/10/2018 Outage 74 1040
5 16/10/2018 19/02/2019 2250MW 39 571
6 19/02/2019 23/03/2019 Outage 30 439
7 23/03/2019 06/04/2019 2250MW 4 59
7 06/04/2019 ? Outage 0 0

WesternLinkGraph

Figure 2: (a) The available capacity of the Western Link interconnector from 2016 to 13 April 2019 showing outages and reduced capacity; and (b) the constraints costs in £million per number of days in the relevant period paid to Scottish wind farms. The numbers on the plots refer to the key in Table 1.

Over the period 2016–7th December 2017 the interconnector was unavailable due to late delivery, and constraint payments to wind in Scotland totalled £168m. During the period December 2017 to 5th May 2018 the interconnector was running at reduced capacity and constraints totalled £25m. Payments during the outage from May to October 2018 amounted to £74m, and during the outage 19 February to 22 March 2019 a further £30m. Adding this all together, we see that £168m was paid over the late delivery period, and during the outages and reduced capacity periods, a further £129m. Furthermore, as indicated above, it should not be forgotten that there are also payments to conventional generation south of the grid constraint to re-balance the system.

Not all of these costs would have been avoided if the interconnector had been working as promised, but some considerable part would have been prevented. It has been reported that Ofgem is now investigating the Western Link failures to determine if the late delivery and outages are to be blamed on gremlins, or result from negligence. Ofgem will also presumably be asking whether some part of the resulting constraint payments on both sides of the bottleneck, can be attributed to that negligence, if any, and the consumer costs recovered from the responsible party or parties.

The three areas that Ofgem will probably be examining are:

1. Failure of quality control in manufacturing
2. Faulty installation
3. Inappropriate specification of the equipment

Of these, the first two would appear to be the responsibility of Prysmian and perhaps Siemens, as the manufacturer and installers. The question of specification, however, could also involve both National Grid and Scottish Power Transmission as commissioning owners. Such an error of specification, if not negligent, would be understandable; honest mistakes of this kind are not uncommon in large projects. However, there must be a suspicion that the specification of the project was deliberately and over-ambitiously engineered to reduce costs at the hazard of reliability. Such a trade-off would be unsurprising in this case, since transmission assets designed solely to carry wind energy — and the Western Link has no other purpose — are very likely to be under-utilised, due to the low load factor of wind farms, which onshore rarely exceed 30% over a year. This problem is endemic in the renewables industry, and is well known in the offshore wind industry, for example, where the attempt to drive down costs and preserve market position as subsidies are scaled down and cancelled, has resulted in a higher rate of cable failures. Indeed, the FT quotes the consultancy 4C offshore to the effect that there have been 40 cable failures at offshore wind farms since 2014, and other sources suggest that 90% of offshore wind farms have had problems with their cables, with the blame being laid squarely at the pressure from developers for cost reduction, with manufacturers responding to pressure by introducing new and relatively untested products to meet customer specifications (see “High Price of Low Cable Costs” and related stories, ReNews (7 February 2019), 11–13).

This could be true of the Western Link, which is a novel kind of interconnector, being the first such project in the world to transmit DC power at 600kV, rather than the more normal 500kV. The increase in voltage is made possible through the use of a novel form of insulation, Paper Polypropylene Laminate insulation impregnated with fluid (see “Ready, Willing and Cable”, Power Engineering International 5 Jan. 2018. The beneficial economic consequences of the higher voltage made possible by this new insulation system are a parallel 20% increase in the power capacity of the cable and a reduction of transmission losses by a third. For an underutilised cable these are very tempting prizes, and it is quite plausible that National Grid, Scottish Power and their contractors decided to take a risk on a relatively untried technology. If that is the case, the gamble is not turning out well.

We are left, then, with a question: Is the fault-prone state of the Western Link interconnector the inevitable outcome of inorganic, policy-driven, coerced and overheated sectoral growth resulting in advanced technological deployment well ahead of the learning curve and at the expense of the consumer? If the answer to that question is Yes!, government will have to admit that it too has a share in the blame.

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