Wind farm owners are ripping off the public – and fighting to stop change

Telegraph

21-02-2025

Many of our greatest inventions were driven by urgent need, but went on to become invaluable parts of our world. Microwave ovens, for example, came from wartime research, as did modern computers. Britain played a key role in many, but often failed to commercialise because of short-sighted policy.
So it may be with renewables. After they were initially subsidised to tackle climate change, many economies are capitalising on them for abundant cheap electricity, independent from foreign powers or global markets.
For example, in Texas, the home of oil and gas, renewables account for up to 73pc of electricity. Taking advantage of a pure form of locational energy pricing, it is enriching its citizens with energy abundance and becoming a location of choice for data centres and manufacturing.
Renewables can deliver incredibly cheap power – as they do in places as diverse as Texas and Scandinavia – but only with the correct market structure.
However, Britain suffers from a staggeringly inefficient market, reminiscent of the wine lakes and butter mountains of the old European Common Agricultural Policy.
We are forced to pay wind farms billions of pounds each year to switch off, and import energy from Europe when we have excess power we should be exporting. We send prices skyrocketing across Britain when a single expensive gas power plant is switched on anywhere in the country.
The British state forces us to accept an artificial national electricity wholesale price that ignores the price signals that drive efficiency. It's like every region being required to charge London house prices, and is set to cost an unnecessary extra £4bn to £5bn per year. Without reform, energy costs will continue to rise and economic growth will remain elusive.
If we follow other thriving economies and adopt zonal pricing – in which price signals reflect local supply and demand to reduce waste – analysts predict Britain could have some of the cheapest energy prices in Europe, even with the same renewables pipeline as today and if no industry shifts location.
And by allowing wholesale prices to fall where supply is high, new industries, such as data centres and modern factories, could be enticed to locate here. The money saved would mean lower bills for families, but also for struggling existing heavy industry, and free up money to further support these if we chose.
Opponents say we can't build wind farms in London. True, but there are many areas in the country where local people would welcome wind farms if it cut bills.
For example, areas that have seen industrial decline and already have grid connections so don't need to wait or pay for new pylons. And it's not just about big projects. For example, zonal pricing would improve the economics of rooftop solar in built-up areas.
With zonal pricing, all households' and businesses' energy bills could fall – not 'eventually', but well in advance of 2030. In fact, as soon as the decision is made we can scrap plans for thousands of miles of unnecessary and costly pylons.
To listen to some corporates, you would be forgiven for thinking the goal of energy policy is to fork out as much of customers' money as they demand to build turbines that often stand statue still – then pay them again for gas generation to compensate.
Generators view government, not bill payers, as their customer. The state is often at a disadvantage when procuring from the private sector and so, untroubled by consumer power or much competitive tension, generators have grown used to a sellers' market. If government backs consumers over producers, corporates stand to forfeit easy profits – and will have to work harder. It is understandable they are deploying every threat in their arsenal to lobby politicians into inertia.
Threats come most angrily in the form of scaremongering over investment. Their claims are easily disproven by looking at the many markets that have seen increases in investment, sometimes from these same companies, since switching to zonal market design. Investment without regard to efficiency is not investment, it's waste.
This should always matter to government, but the renewables industry and climate campaigners should care too. Public support for net zero remains high at 43pc, with just 20pc opposing, but it is not unqualified. Of those who support net zero, a whopping 71pc would not continue to do so if energy prices increase.
The lessons of history are clear. Britain crashed out of the Exchange Rate Mechanism at huge expense because prices couldn't flex to market conditions. Nokia and Blockbuster disappeared because they buried their heads in the sand. Shareholders and citizens are best served when leaders accept reality and adapt. We've overpaid for energy for too long and now is time to fix that.