A Norwegian owned wind farm has been paid over £1 million to stop generating electricity for just 8.5 hours.
The news that a wind farm has been paid not to generate electricity has resulted in calls for an investigation into the payment system for electricity generation. The amount the owner of the wind farm received is actually ten times more than they would have received if it had generated electricity.
The Sunday Telegraph reported that the incident occurred in Scotland last week when the National Grid asked Fred Olsen Renewables to stop generating electricity at Crystal Rig II wind farm. The reason for the request was because of the high winds caused by the aftermath of Hurricane Katia and there were concerns that the electricity network would become overloaded.
It’s easier to shut down wind farms than it is a coal fired power station which will take much longer to re-start. However, strangely last week, coal and gas fired power stations were running on reduced power and energy companies paid the National Grid to be able to do this. This is because energy companies save money because they’re not burning so much fuel.
In all eleven wind farms were shut down and the National Grid paid out a total of £2.6 million. There are concerns that this will be added to consumer’s energy bills and a time when domestic and business electricity prices are already high.
The Crystal Rig wind farm received the biggest “constraint payment” after National Grid asked companies to say how much compensation they wanted for shutting down their operations. Normally wind farm owners will be paid around £100 per MW/h of energy generated but Fred Olsen Renewables asked for £999 per MW/h and National Grid agreed to pay them this amount.
The chairman of the energy and climate change select committee, Tim Yeo, has called for an investigation into the prices paid to wind farms. He said “The very principle of paying wind farm owners for not producing is one that is offensive to consumers”.
He added “It looks on the face of it like an extraordinary overpayment by the National Grid, for which an urgent explanation is required. This requires an immediate investigation by the energy watchdog Ofgem”.
Director of The Renewable Foundation, Dr John Constable, said “This system appears to be unreasonable, is not in the consumer interest and requires the urgent attention of the regulator, Ofgem”.
In its defence a spokesman for Fred Olsen Renewables said “Crystal Rig is one of the largest wind farms in the UK so it is one of the last farms we intend to get switched off, so the price is set that high. There are about four or five developers who do the same thing, set it at the £999 level to try and keep it up as long as possible. Crystal was one of the last to be shut off”.