Renewables industry welcomes constraint cost breakdown

The renewables industry has welcomed National Grid data showing most “constraint payments” go to conventional generators, not windfarms.

Payments to wind generators to turn off when the grid cannot handle all their power have become a political issue. Energy minister Michael Fallon last week threatened to legislate against small windfarms if they did not show “restraint” when bidding for compensation.

One of National Grid’s many tools for balancing the system, the payments have been singled out for attention by anti-wind body the Renewable Energy Foundation and regularly feature in the media.

On Tuesday, National Grid for the first time published a full breakdown of constraint payments by generation type as part of its monthly balancing services summary.

Windfarms were paid £3.6 million to compensate them for having to temporarily halt generation in January. Gas power generators netted more than five times that sum, £19.6 million, in payments to rebalance the system. The total cost of constraints was £26.6 million, 44 per cent of all balancing services.

Maf Smith, deputy chief executive of Renewable UK, said the information would “scotch a few myths” and “provide welcome clarity on this complex issue”.

The release “shows what we’ve been saying for some time,” said Scottish Renewables director of policy Jenny Hogan. “Different types of generation are constrained off the grid, not just wind; and renewables are not the most likely generation to receive payments to balance the grid.”

Scottish Renewables is “keen to see these costs reduced further”, Hogan added, through network upgrades and use of electricity storage.

In a blog accompanying the statistical release, National Grid head of network strategy Phil Sheppard admitted the idea of paying a generator to stop producing seemed “illogical”. However, he said it was sometimes a more economic way of managing bottlenecks than major grid upgrades.

Constraint costs will continue to be part of the picture over the next few years, as government operates a “connect and manage” policy. That means new generators can connect before the grid is ready for their full capacity, rather than wait for extensive upgrades to be finished. Since 2011, 15 large scale windfarms have connected on that basis and saved an estimated 930,000 tonnes of carbon dioxide emissions.

Sheppard said: “We believe this is the right strategy, because it’s in the country’s best interests to get as much capacity on the system as quickly as possible.”