Renewable Energy Foundation

Payments to wind farms to reduce output are an ongoing national scandal, with the cost to consumers now totalling well over £1 billion since the payments began in 2010.

We have repeatedly observed that the prices charged by wind farms to reduce output not only routinely exceeded the subsidy income lost when constrained but were hard to justify in any case. Grid congestion preventing dispatch is a foreseeable commercial risk and the windfarms should not be compensated at all for such an eventuality.

However, it has been accepted by government and the regulator that such compensation – for lost subsidy – should be paid.

However, in recent months Scottish wind farms that are not in receipt of income support subsidy, so called “subsidy-free”, wind farms have also been charging the electricity system operator to reduce output when generation in Scotland exceeds grid capacity and local demand.
Read more...

Attachments:

UnsubsidisedConstraints

Large volumes of wind energy are being discarded in Scotland in order to preserve grid stability, with a fleet average of over 13% of generation constrained off in the years 2015 to 2021, inclusive, with a high of 19% of generation in 2020. Some wind farms have been discarding between 20% and 50% of their output, while being rewarded with generous constraint payments from the electricity consumer for doing so. The reductions in environmental benefits are not given adequate weight in the planning system, where the low marginal benefit of additional wind capacity appears to be poorly understood. This blog offers detailed data on the volumes of wind energy constrained off at a fleet level in Scotland between 2010 and 2021, and for every individual wind farm in 2020 and 2021.

It is frequently claimed that the subsidy cost of offshore wind farms has fallen over the past few years. The UK government itself is on record as recently as November 2020 claiming that:

Government support to unleash the potential of offshore wind generation has seen the cost of it fall by two thirds in the last 5 years.

Echoes of these claims are commonplace. The Times (08.07.21) reports the think tank Policy Exchange as remarking that “the cost of offshore wind power had fallen steeply in recent years”.

As work by Professor Gordon Hughes has shown, the capital and operating costs of offshore wind do not support these observations, and, as this blog will demonstrate, it is a matter of fact that the cost of consumer subsidies to offshore wind per unit of electrical energy generated (MWh) has risen and continues to rise year on year.

There is ongoing interest in Professor Gordon Hughes’ empirical work on the economics of wind power, with occasional requests for talks and summaries, and updates and recent reflections. The attached paper was presented recently to a London-based financial organisation. It summarises afresh the work published by REF in 2020, and offers additional comments.

Attachments:

GH Presentation June 2021 on Investment Returns for Wind Power

On the 10th of April this year Professor Gordon Hughes of the University of Edinburgh submitted a paper on the economics of small-scale wind generation in Northern Ireland as formal evidence to the "Inquiry into Generating Electricity from Renewable Energy” conducted by the Public Accounts Committee of the Northern Ireland Assembly.
Read more...

Attachments:

Gordon Hughes Evidence to NI Public Accounts Committee 22 April 2021

Professor Gordon Hughes has written the following blog describing his experience of sourcing reliable energy supplies to power a remote rural broadband network in Scotland.

I have written a number of papers on the costs and performance of wind power and other forms of renewable energy. Even serious empirical research provokes responses along the lines that any questioning of the merits of renewable energy amounts to original sin or blasphemy. There is little that I – or anyone – can do to convince those who treat the superiority of renewable energy as an article of faith. Still I wonder how much practical experience such commentators have of the reality of relying solely on renewable power in commercial applications. For this reason other readers may be interested in what I have learned as an economist faced with the practical issue of relying upon renewable energy.
Read more...

Attachments:

The reality of relying upon renewable power:a personal view

Renewable energy is often claimed to empower local communities as well as providing economic benefits. Part of the logic is that renewables seem to offer “energy independence”. The truth is less straightforward. In this article, co-authored with Professor Gordon Hughes of Edinburgh University, REF examines the case of the Viking Energy wind farm in the Shetlands and more broadly that of Scotland itself.

The following is the text accompanying the talk given by Professor Gordon Hughes, School of Economics, University of Edinburgh on 4 November 2020 to launch his two new reports for REF on:

Wind Power Costs in the United Kingdom  and

The Performance of Wind Power in Denmark

For a recording of the event, please click here.

It is difficult to make predictions, especially about the future. [Attributed variously to Niels Bohr (Nobel Prize in Physics) and Sam Goldwyn (movie mogul)]

The theme of my talk is the disparity between predictions about the future costs and performance of wind power (especially offshore wind) - the Rhetoric - and the actual evidence that is available on what it costs to build and operate wind farms and the amount of power they produce over their lifetime – the Reality.
Read more...

Attachments:

Gordon Hughes REF webinar text 4 Nov 2020

WEBINAR - 4th November 2020 at 11.00 am

The Renewable Energy Foundation would like to announce the publication of a major new study:

Wind Power Economics: Rhetoric and Reality

written by Professor Gordon Hughes of the School of Economics at the University of Edinburgh. This study, which will be published on November 4th 2020, uses a unique database on the actual costs of building and operating more than 350 wind farms in the UK. In addition, it provides a detailed analysis of the performance of more than 9,500 wind turbines in Denmark focusing on their cumulative output and reliability.

The study can be obtained from the Renewable Energy Foundation website from midday on November 4th 2020.

To accompany the release of the study, the Renewable Energy Foundation will host a Webinar on November 4th 2020 at 11.00 am at which Professor Gordon Hughes will be the main speaker. He will present the main findings of his study and answer questions on his work.

There is no charge for joining the webinar but please note that the number of participants is limited to 100. To obtain the details of how to join the webinar please email  This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

The Sunday Telegraph has today reported on REF’s forthcoming major new analysis by Professor Gordon Hughes, under the title Wind Power Economics: Rhetoric and Reality.

The study contains two volumes, one on the Performance of Wind Power in Denmark and the other on Wind Power Costs in the United Kingdom.

On the basis of a large and detailed statistical analysis of audited accounts and other performance data Professor Hughes shows that far from falling dramatically, capital costs for wind power have come down only slightly, and that Operation and Maintenance (O&M) costs required to maintain energy yields are actually rising sharply, throwing the medium and longer term economics of the entire enterprise into jeopardy.

The study will be published shortly with a webinar, and anyone interested in being added to the mailing list for that announcement should write to us at REF at This e-mail address is being protected from spambots. You need JavaScript enabled to view it