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REF Blog

UK Wind Constraint Payments Reach New and Exceptional Levels

Constraint payments to wind power are hitting new records on a regular basis. The highest daily total, £4.77m occurred on the 8th of October 2018, and the highest monthly total of £28.4m in September 2018, a staggering £5m more than the previous record of £23.2m in October 2017. The annual record, set last year, of £108m looks almost certain to be broken this year, where the total is already £101.5m to the 19th of October 2018.

Constraint payments to wind power, mostly but not now entirely in Scotland, comprise a staggering 8% of the cost recovered through the Balancing Services Use of System (BSUoS) charges, with a very substantial proportion of the remainder being caused by wind constraints that require conventional generation to be constrained on to the system south of the constraint to make up for the absence of contracted wind.

Some part of these records are the result of the late delivery of the 2,250 MW WesternLink High Voltage Direct Current (HVDC) link between Hunterston and Deeside, which was intended to enter service at the end of 2015, but has only just been commissioned in September 2018, due to a series of faults that must be both embarrassing for its builders, Siemens and Prysmian, and financially disappointing for its owners, National Grid and ScottishPower Transmission.

But the late arrival of this very expensive, more than £1bn, sticking plaster, probably adding upwards of £50m a year to consumer bills (it is a rule of thumb that grid imposes a standing charge on the consumer of about 5% of the capex for the 30 to 50 life of the asset), cannot explain all the increase observed, and certainly cannot provide a complete solution to what is clearly an acute and growing problem for the system.

What is going on? National Grid is being fairly cagey, and has not yet released comments on the vast constraints paid in September, but there is information coming out about the significant costs during the weekend of the 28th and 29th of July, when over £7m was paid out, with one large offshore wind farm in English and Welsh waters, alone, receiving about £1m over the period, according to the Balancing Mechanism data that REF publishes.

Presentations delivered at National Grid’s “Transmission Operation Forum” show that this was an event novel in character, consisting both of the by now familiar combination of high wind output and low demand (renewables are poorly correlated with demand patterns), and a series of unfortunate coincidences on the network. National Grid describes the event in the company’s obscure, acronym and jargon-laden Powerpointese thus:

There were several limitations on system operation for the ESO [Electricity System Operator], across both System and Energy. The flow of power North to South was restricted by a significant year ahead outage coupled with the HVDC [High Voltage Direct Current interconnector –the Western Link] not yet commissioned. In addition, a lack of conventional generation, displaced by high wind output, resulted in Negative Reserve, Voltage and ROCOF [Rates of Change of Frequency] problems. This resulted in actions on high priced wind units to solve Negative Reserve and Response requirements.

We can try to put this more clearly: the flow of energy from wind power in the North was restricted because some grid lines were out of action due to long-planned maintenance, a situation that was made worse by the fact that the WesternLink, which was expected to be in service by now, had experienced yet another fault. This basic difficulty was compounded by the fact that conventional generation, probably gas fired power stations, had been displaced from the market by wind power, leaving the grid network vulnerable to problems caused by voltage fluctuations, rapid changes in system frequency (which risks tripping embedded generators off the system causing cascading problems), and concerns that they would not be able to call on sufficient generation to reduce output and contain upward excursions in system frequency (negative reserve).

The high cost in dealing with this set of problems resulted from a novel development: the constraint boundary, normally located on the Anglo-Scottish border moved down to a location in the midlands, leaving several large offshore wind farms, including West of Duddon Sands, near Barrow-in-Furness, north of the constraint. Offshore wind farms charge more to reduce output than onshore wind farms ostensibly because they lose more subsidy per MWh lost when constrained off. As a matter of fact, and as shown in the REF blog in July, the charges ranged from £28 to £79 per MWh in excess of the subsidy lost.

National Grid illustrates the 28–29th July 2018 weekend problems with this map:

What do we learn from all this? As has long been predicted by systems analysts and grid engineers with practical experience of systems operation, the presence of large volumes of renewables on a system such as that of the UK will very significantly increase its fragility, making it vulnerable to unfortunate coincidences of adverse circumstances, such as those on the 28th and 29th July 2018. Addressing these problems is not, at least at present, impossible, but it is very expensive, and becoming more so.

We now await with great interest National Grid’s detailed explanations of the problems that required them to spend £28m of consumer funds on wind constraints in the month of September 2018 and the eye-watering £12.5m spent in just three days over 7–9th October 2018. Are these events exceptional, or just the New Normal?

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Record UK Wind Farm Constraint Payments of £28m for September 2018

September 2018 has seen the highest monthly payments to wind farms to stop generating since records began in 2010.

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Weekend constraint payments record

Constraint payments to wind farms in the United Kingdom totalled £7.12m over the weekend, 28–29 July 2018, making it the most expensive weekend to date and well above the previous record of £5.87m for 24-25 June 2017. Constraints on Saturday the 28th of July amounted to £4.41m, and on Sunday the 29th to £2.71m.

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Interconnector problems mean wind farm constraint payments continue

Over the last few days REF has been delving into the wind constraint payments data to assist an investigation by the Scotsman newspaper into ongoing problems with the Western Link HVDC Interconnector, a 2.2 GW, £1 billion subsea cable from Hunterston to Deeside expressly built to carry Scottish renewable electricity to English and Welsh consumers.

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Early Rooftop Solar PV Adopters Get Lion’s Share of the FiT Subsidy

As is well known, the generous subsidies given initially to small scale solar PV under the UK Feed-in Tariff resulted in unexpectedly high levels of adoption. Government quickly reduced subsidies for new installations, but did not feel able to retrospectively cut the arguably excessive support for early adopters. Consequently, even today, in 2017, nearly one quarter of the total annual cost of the scheme is being paid to the small-scale rooftop panels erected in the first two years of the scheme, 2010–2012.

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The Total Cost of Subsidies to Renewable Electricity in the United Kingdom: 2002–2016

REF is often asked about the total cost of public support to renewable electricity generators, both annually and since the subsidies began.

The following table gives aggregate figures for the administrative years 2002–2003 to 2015–2016. Administrative years run from the 1 April to 31 March the following year.

Year RO (£m) FiT (£m) Total (£m)
2002-2003 278 278
2003-2004 416 416
2004-2005 495 495
2005-2006 583 583
2006-2007 719 719
2007-2008 876 876
2008-2009 1,036 1,036
2009-2010 1,119 1,119
2010-2011 1,285 14 1,300
2011-2012 1,458 151 1,608
2012-2013 1,991 506 2,498
2013-2014 2,599 691 3,290
2014-2015 3,114 866 3,980
2015-2016 3,743 1,110 4,853
Total (£m) 19,818 3,338 23,156
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Santa's Christmas present for wind farms

Over the Christmas period, high winds accompanying Storms Barbara and Conor combined with low demand for electricity to deliver a £7 million gift to the owners of wind farms in the form of constraint payments. Constraint payments occur when wind farms are paid not to generate, usually in periods when wind generation is surplus to demand. The bulk of these payments are made when wind generation cannot be used in Scotland, and there is insufficient grid capacity to export the energy to England. The cost of these payments is borne by electricity bill payers throughout the United Kingdom.

The peak payments over the current holiday season were made on Christmas Day, as summarised in the following table drawn from the REF datasets:

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Renewables planning activity in the last six months

As regular users of the REF datasets will know, our EU Target Tracker is updated monthly and based on the government’s Renewable Energy Planning Database (REPD). This month’s update has just been released, and merits a general comment.

As a rule, the totals change little month on month, with the major trends only being visible over longer timescales. Focus on the short term and net changes is a mistake. It is only by studying the changes at the individual planning application level over 6 months or longer that we can see the major trends and the impacts of changes in government policy.

To that end, we have compared the detailed planning data released for April 2016 with that released this week for November 2016. We looked at how many new applications have been submitted in the last half year, how many abandoned, how many were granted or refused planning permission, how many appealed by the developers, and how many have begun construction and operation. Predictably, 80-90% of the activity involves onshore wind, solar photovoltaic and offshore wind.

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New wind farm constrained off grid within days of opening


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.

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Government Data on Renewable Energy Development is Inconsistent and Unreliable

There are significant inconsistencies between the various sources of Government data on renewable energy deployment which undermine confidence in claims regarding progress towards 2020 targets and firm control of subsidy costs to the consumer. For example, the government’s Renewable Energy Planning Database (REPD) is the principal source for estimates of progress and probable future cost, but is inconsistent with five other data sources published by government, and also with estimates made by National Grid. What cannot be measured accurately cannot be managed adequately. Government needs to get a grip.

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