Latest news with #EuropeanCommonAgriculturalPolicy
Telegraph
21-02-2025
- Business
- Telegraph
Major wind farm was paid £65m to cut power output by three quarters
One of Britain's biggest wind farms was handed £65m to slash its output by nearly three quarters last year, amid warnings that the country's 'staggeringly inefficient' power grid is pushing up household bills. The Seagreen offshore wind farm in the North Sea – the largest of its kind in Scotland – had its output curtailed for 71pc of the time it was due to operate in 2024, grid data show. This meant that of 4.7 terawatt hours of power its turbines generated, 3.3 terawatt hours were effectively discarded – with owner SSE paid by grid operators each time this happened. SSE also owns the Viking wind farm in the Shetlands, which had 57pc of its output curtailed last year at a cost of £10m. It was only switched on in August. The two sites have been paid another £1.5m so far this year for cutting output. Grid operators pay wind farms to switch off when they are generating but there is not enough network capacity to transport their power. But these curtailment payments ultimately go on to bills, in the form of network charges, and are paid by millions of households and businesses. Last year, separate analysis by the Renewable Energy Foundation charity found that wind farms were paid almost £400m to turn off their turbines. On Friday, SSE said grid upgrades were coming that would result in 'more and more of this power flowing into the economy, powering homes and businesses for decades to come'. A spokesman said: 'Seagreen and Viking wind farms are incredible assets that give Britain the ability to harness huge volumes of its own clean, homegrown energy that can drive economic growth while reducing reliance on volatile imports.' One source close to the company added that Seagreen's cheap generating price meant it was also more likely to be chosen for curtailment by grid operators than other, more expensive sites. But the figures will fuel a row that is raging in the energy industry over controversial proposals to introduce regional electricity pricing in the UK, replacing the current national price system. Greg Jackson, the chief executive of Octopus Energy, compared the existing arrangement to 'every region being forced to charge London house prices' and warned it would add £5bn to bills by the end of this decade. Writing for The Telegraph, he said: '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 each year to switch off and import energy from Europe when we have excess power we should be exporting. 'Without reform, energy costs will continue to rise and economic growth will remain elusive.' His comments come after Alistair Phillips-Davies, the chief executive of SSE, warned that switching to regional electricity prices risked pushing up bills and derailing Ed Miliband's plan for a clean power system by 2030. He warned the reforms would cause unnecessary delays and uncertainty, spooking the investors that ministers want to invest in wind and solar farms across the country. In an article for The Telegraph, Mr Phillips-Davies said: 'The clean power prize is a golden economic opportunity for Britain that is achievable without this costly distraction – don't blow it now. Responding to these claims, however, Mr Jackson accused wind farm developers such as SSE of 'scaremongering'. He said: '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.' A spokesman for the National Energy System Operator (Neso) said curtailment payments made up 2.4pc of a typical annual customer bill. Based on the current energy bill price cap of £1,738, this would amount to about £42 a year. The spokesman added: 'Neso takes its role to deliver a safe, secure and reliable national electricity network at least cost to consumers, extremely seriously. 'We make constraint payments when it is most cost-effective to temporarily reduce generation output in a specific area. 'We are constantly looking for new ways to reduce costs associated with balancing electricity supply and demand on a second-by-second basis, as these costs are passed on to consumers in their electricity bill.' A Department for Energy Security and Net Zero spokesman said: 'The Neso's independent report shows we can achieve clean power by 2030 with cheaper electricity, even when factoring in constraint payments, and a more secure energy system for Britain. 'Through our Clean Power Action Plan, we will work with industry to rewire Britain, upgrade our outdated infrastructure to get more renewable electricity on the grid, and minimise constraint payments.'
Yahoo
21-02-2025
- Business
- Yahoo
Major wind farm was paid £65m to cut power output by three quarters
One of Britain's biggest wind farms was handed £65m to slash its output by nearly three quarters last year, amid warnings that the country's 'staggeringly inefficient' power grid is pushing up household bills. The Seagreen offshore wind farm in the North Sea – the largest of its kind in Scotland – had its output curtailed for 71pc of the time it was due to operate in 2024, grid data show. This meant that of 4.7 terawatt hours of power its turbines generated, 3.3 terawatt hours were effectively discarded – with owner SSE paid by grid operators each time this happened. SSE also owns the Viking wind farm in the Shetlands, which had 57pc of its output curtailed last year at a cost of £10m. It was only switched on in August. The two sites have been paid another £1.5m so far this year for cutting output. Grid operators pay wind farms to switch off when they are generating but there is not enough network capacity to transport their power. But these curtailment payments ultimately go on to bills, in the form of network charges, and are paid by millions of households and businesses. Last year, separate analysis by the Renewable Energy Foundation charity found that wind farms were paid almost £400m to turn off their turbines. On Friday, SSE said grid upgrades were coming that would result in 'more and more of this power flowing into the economy, powering homes and businesses for decades to come'. A spokesman said: 'Seagreen and Viking wind farms are incredible assets that give Britain the ability to harness huge volumes of its own clean, homegrown energy that can drive economic growth while reducing reliance on volatile imports.' One source close to the company added that Seagreen's cheap generating price meant it was also more likely to be chosen for curtailment by grid operators than other, more expensive sites. But the figures will fuel a row that is raging in the energy industry over controversial proposals to introduce regional electricity pricing in the UK, replacing the current national price system. Greg Jackson, the chief executive of Octopus Energy, compared the existing arrangement to 'every region being forced to charge London house prices' and warned it would add £5bn to bills by the end of this decade. Writing for The Telegraph, he said: '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 each year to switch off and import energy from Europe when we have excess power we should be exporting. 'Without reform, energy costs will continue to rise and economic growth will remain elusive.' His comments come after Alistair Phillips-Davies, the chief executive of SSE, warned that switching to regional electricity prices risked pushing up bills and derailing Ed Miliband's plan for a clean power system by 2030. He warned the reforms would cause unnecessary delays and uncertainty, spooking the investors that ministers want to invest in wind and solar farms across the country. In an article for The Telegraph, Mr Phillips-Davies said: 'The clean power prize is a golden economic opportunity for Britain that is achievable without this costly distraction – don't blow it now. Responding to these claims, however, Mr Jackson accused wind farm developers such as SSE of 'scaremongering'. He said: '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.' A spokesman for the National Energy System Operator (Neso) said curtailment payments made up 2.4pc of a typical annual customer bill. Based on the current energy bill price cap of £1,738, this would amount to about £42 a year. The spokesman added: 'Neso takes its role to deliver a safe, secure and reliable national electricity network at least cost to consumers, extremely seriously. 'We make constraint payments when it is most cost-effective to temporarily reduce generation output in a specific area. 'We are constantly looking for new ways to reduce costs associated with balancing electricity supply and demand on a second-by-second basis, as these costs are passed on to consumers in their electricity bill.' A Department for Energy Security and Net Zero spokesman said: 'The Neso's independent report shows we can achieve clean power by 2030 with cheaper electricity, even when factoring in constraint payments, and a more secure energy system for Britain. 'Through our Clean Power Action Plan, we will work with industry to rewire Britain, upgrade our outdated infrastructure to get more renewable electricity on the grid, and minimise constraint payments.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Telegraph
21-02-2025
- Business
- Telegraph
Wind farm owners are ripping off the public – and fighting to stop change
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.
