From NOT A LOT OF PEOPLE KNOW THAT
By Paul Homewood
h/t Philip Bratby
From the Telegraph:
The Czech billionaire buying Royal Mail and energy giant SSE are among the power plant operators being paid millions of pounds when Britain’s wind farms are switched off.
A total of £400m was spent last year on so-called curtailment, when wind turbines are told to stop generating because the grid is too congested to accept their power.
Firing up alternative plants – in many cases gas-fuelled ones – to replace this electricity elsewhere on the system also costs the taxpayer upwards of £600m.
Some wind farm companies are making tens of millions of pounds from the switch-offs, according to analysis for The Telegraph.
They include SSE, which made an estimated £138m in 2024, while Moray wind farms owner Ocean Wind made £92m, French state power company EDF took £25m and Scottish Power, which is owned by Spain’s Iberdrola, another £13m.
SSE also made an estimated £179m from providing replacement gas-fired power generation in the same year, while another £92m was made by EP UK, the energy business owned by Daniel Kretinsky, who is buying Royal Mail for £3.6bn.
German power giant Uniper also made £131m, while Vitol Group’s VPI and Intergen received £89m and £88m respectively.
Read the full story here.
This £400 million will be a drop in the ocean compared to what is coming in the next few years.
The problem at the moment is a localised one, where there is too much wind power in Scotland for the connectors to England to cope with.
In future however, if wind capacity is tripled as planned, there will be too much wind power for much of the year across the whole of the country, as on windy days it will exceed demand.
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Such payments have to stop now that the technology is tested.
These are not subsidy payments. They arise in the specific circumstances where a seller cannot supply a buyer because of network congestion. They are in effect a civil liability of NESO. And NESO explains here why it is much cheaper for them to accepta level of such payments rather than to overbuild the system so that congestion can never happen.
Contra Paul above, it isn’t a payment when there is too much power for the demand. It only applies when a seller has agreed with a buyer and NESO can’t connect.
It mainly arises with wind because of the weak connection with Scotland, but any type of generator can get such payments.
Nick, when a wind farm is paid to produce nothing at all, that is daylight robbery.
Wrong.
The main problem with wind is that the wind tends to blow a lot during the 11 pm to 5 am period – which is when nobody uses electricity. Add this the up to x5 overbuild due to wind’s inherently lower capacity factor vs fossil fuels/nuclear – it should surprise no one that wind curtailment payments continue to grow.
This is a structural problem which connectors will not fix.
Expanding further: congestion does occur due to maintenance, squirrel attacks etc. However, it is abundantly clear that wind curtailment is occurring not primarily due to congestion, it is due to the above production profile.
The MISO – which is mostly the 6 upper MidWest states of Iowa, Indiana, Illinois, Minnesota, Wisconsin and Michigan – paid $1.6 billion for curtailment in 2023. “over half” was due just to wind.
The SPP – which goes from North Dakota down to North Texas, had 15.2% negative electricity prices in 2022 – that’s 1.8 months out of the year equivalent, also due to wind.
Between the US, Germany, UK and Spain – I estimate $17 billion was paid due to curtailment/congestion just in 2023, of which at least half is due to wind.
Overproduction at grid scales is a huge problem that is also clearly growing in relative impact as wind and solar increase as percentage of base generation. Or in other words, the curtailment costs are scaling faster than generation increase.
How much does a widget manufacturer get paid, if they can’t get their widgets to the factory that needs them, because of an accident on the interstate?
Answer: Nothing.
How much does a widget manufacturer get paid, if they can’t get their widgets to the factory that needs them, because the courier took on more orders than they could cope with?
Answer: Found in the contract agreement between the courier and manufacturer.
“…wind tends to blow a lot during the 11 pm to 5 am period…”
______________________________________________
Huh? Wind speed drops off at night
On average, maybe, but the production profiles of wind on the grid shows clearly that a significant percentage wind generation occurs precisely at night.
When your income is greater by not fixing a problem than by fixing it; it is a boondoggle.
“This is a structural problem which connectors will not fix.”
It may be a structural problem. But it is not the problem in which constraint payments arise. They are restricted to when a transaction cannot be completed because of grid congection. And yes, connectors can fix that.
So can storage. Localised storage takes the peak and variable load off the interconnectors.
That is the theory.
The reality is that grid scale storage – whether it is huge grid scale batteries or masses of distributed “local” storage – is EXTREMELY expensive.
It is not at all clear that there are enough materials even to build this scale of battery storage even if cost is ignored.
Furthermore, a common and utterly wrong presumption of the ignorant and the fools is that grid transmission is cheaper than other forms of energy transport.
The truth is literally the opposite: grid transport of energy via transmission lines is actually MORE EXPENSIVE BY AN ORDER OF MAGNITUDE than moving energy via say, tanker trucks or ships much less pipelines. Aforementioned fools and ignorant people ignore the massive capital and upkeep costs of building and keeping a grid.
Costs are coming down as manufacturing capability continues to ramp up and battery technology improves. Sodium batteries won’t have resource constraints and IMO will end up being the future for grid storage.
Ah, Moore’s law applies?
This curve. That’s lithium. Personally I dont think lithium will ultimately be used for bulk grid storage but YMMV.
Wrong.
Too much electricity on the grid is just as much a problem as a line specific current overload due to above mentioned squirrel attacks or maintenance.
You have absolutely no idea what you are talking about in this area.
The good news is that the UK appears to have changed the pricing paid for wind curtailment; it was well over 50 GBP per MW ranging up to the 70s GBP per MW in the past, but this year is showing 20s GBP per MW.
We will see how much profit is lost by wind turbine owners/operators as a result of this change.
No other electricity generation source (besides the other alternative energy, solar PV) has ridiculous contracts where they MUST be paid high prices even if the output generated is of literally negative value.
I will further point out that the UK has been under tremendous energy pricing pressure due to Nordstream fallout high European natural gas prices – so the excuse of “cheap fossil fuels” cannot be used.
“Grid congestion” means that there is more electricity on offer than there is being demanded? I have to ask, because it is a really strange term. It sounds like one is trying to pump more electricity through the lines then the lines are capable of handling. Would anyone care to explain?
Over the last few years, it always sounded to me that curtailment payments were made because a generator was told to cut back or shutdown because the grid couldn’t accept that generator’s output.
Nick’s chosen link carefully explains why the slogan ‘It is always windy somewhere.’ is not the winner that people think it is.
‘the network cannot physically transfer the power from one region to another’
‘The alternative is building more infrastructure at a significant cost, meaning higher bills for consumers. ‘
Gosh, how much infrastructure is going to be built when wind power is tripled, meaning higher costs for consumers, according to Nick’s chosen source?
Maybe the real alternative is not to build so many windfarms.
Agreed. At the moment we pay people to erect the things and then pay them not to produce electricity from them. It would be a lot cheaper just to pay them not to produce, without requiring them to erect turbines first.
Perhaps they should just be obliged to erect a large memorial stone: XXX was paid this much not to erect a windfarm here, and not to generate electricity from it. Excellent value.
Its a bit like the EU paying farmers to have dairy herds and vineyards and then paying them not to make milk butter and wine. If you want to give away money, at least do it in an efficient way, where more of the money goes straight to your friends pockets, without forcing them to waste a fortune on pointless construction work and destroy the local landscape and environment with it..
Storage has multiple benefits of grid stabilization and catering to peak demand. It doesn’t take a lot of storage to get those benefits. Almost everyone here incorrectly thinks storage needs to cover days, weeks or even months.
Nick
you’ll love this it suits your view of how the world works!
“stating that demand for used EVs is “struggling to keep pace” with supply”
AutoExpress
I like it.
Demand for used toilet paper is also struggling to keep pace with supply.
The majority of leases for EVs in the U.K. are for corporate car schemes for managers, where the tax break given for EVs is obscene. Because of the tax break it’s a no brainer for a manager to chose an EV. This is the main driver of EV sales in the country.
The leasing companies now have the nerve to suggest that the Government subsidizes them to make up for their poor residual value after three years use. Jeez!
As a Corp Car Scheme user you can get an extra £4500 pa tax free by picking an EV over a petrol car. Who could turn that down. But as 90% of new EV’s are sold under these schemes they then hit the reality of having to be sold on at the end of the lease to private buyers with no incentives. No wonder the value crashes.
“It only applies when a seller has agreed with a buyer and NESO can’t connect.”
Ah, yes. Congestion happens when the lines can’t carry more load. So there is plenty of power for the load that cannot be served by the specific wind farm/turbine.
That still sounds like too much power and is a consequence of overbuilding wind power. If a non-renewable power plant encounters this situation, it is shut off and won’t be paid. These terms were given to wind and solar to ensure the owners will always be paid, no matter the conditions, not like dispatchable power stations.
“If a non-renewable power plant encounters this situation, it is shut off and won’t be paid.”
Not true. It will be paid. As I said, it is simply a civil liability.
You are not correct. If a coal or natural gas plant bids into the market and a constraint is indicated, either the constraint is cleared or the bid is not accepted. They do not get paid for energy not delivered, no matter what the cause.
Well I don’t know what market rules you’re referring to but typically contracts exist between generators and major industrials and in that case the network is the entity at fault and liable for payment.
It’s not about failure to bid into the market in that case.
Rationalizing waste and corruption is pathetic. Such arrangements underscore the absurdity of the system. No matter how you juggle it, paying for nothing to satisfy a ponderous agenda is criminal.
No. If Miliband’s vision comes true then in 2030 the UK will have 135GW of renewable, 90 wind and 45 solar. Peak demand will be about 65GW, but this will not coincide with peak generation..
In breezy peak summer this will lead to excess generation and constraint payments regardless of transmission capacity between Scotland and the South East. The more wind he puts in, the worse it will get.
But in January solar will have vanished and wind will be doing under 10GW for days on end with the usual blocking high to the SW, and you will pay a fortune on interconnect and have a nationwide blackout anyway. Transmission will not be the gating factor, actual generation will be. Doesn’t matter how much transmission capacity you have if there is no power to transmit over it.
The problem is intermittency. On public view every day on
http://www.gridwatch.co.uk/wind
Its not just that it varies. Its that peak generation and peak demand are not matched, and cannot be matched.
Why are the climate agitators in collective denial about this?
“In breezy peak summer this will lead to excess generation and constraint payments regardless of transmission capacity between Scotland and the South East.”
Hardly anyone here seems to get the point that constraint payments are not a response to overproduction. They come into action when a seller has contracted with a buyer, and grid congestion prevents delivery. Wind over-production without buyers does not induce constraint payments. NESO has control of this, because it decides the number of seller bids to accept. It is only when they have linked up a buyer and seller and then can’t deliver, that they are on the hook.
The solution to excessive constraint payments is to increase transmission capacity.
In every other industry, when your customers don’t need/want your product, or for any reason, you can’t get your product to market, you get paid nothing.
Constraint payments occur when a customer wants the product, and can’t get it because of congestion. In any industry, if a transaction fails because of some inadequacy and costs are incurred, as a matter of civil law the inadequate party is liable for compensation.
So you agree that coal and gas power stations should be paid “constraint” payments every time they have to throttle back to make way for erratic wind and solar.
“the inadequate party is liable for compensation.”
So you also agree that wind and solar should have to pay compensation when they fail to provide any electricity. !
We can all agree on that.
That is a situation that does not occur for structural reasons.
That would depend on the contract. One they are unlikely to sign.
“That would depend on the contract.”
Yep, the subsidies, the lack of responsibility to supply when needed, the payments if the provide too much.
For wind and solar, it is all just a parasitic take, take, take.
Regardless whether your analysis is correct or not, those are costs associated with which form of electrical generation and which forms of electrical generation do not incur such costs?
It seems an equivalency is there comparing curtailment costs with world oil/natural gas/coal price fluctuations.
Gas and coal power stations should be on a level playing field.
They should be paid “constraint” payments every time they have to reduce their output to allow for wind and solar to operate on the grid.
This is only fair and reasonable.
Nick,
the dreadful Scottish government encourage wind and shut down valuable generation.
Wind is also uncontrollable so excess just happens, conventional generation in contrast can control output.
The curtailed generators are connected, it is that the transmission lines cannot handle the excess available power on the rare occasions wind is very strong. As a per centage of payments to wind farms, curtailment is presently relatively low compared to all the other payments they get.
The transmission lines are correctly sized for the load between Scotland and England but far too great a capacity of wind has been built when it should not have been.
A simple basic electrical engineering rule is site the source and the load as close as practical, this sitaution blows that criteria out of the water.
Payments to natural gas generators due to lack of natural gas supply would be considered ludicrous….just sayin’….
£400 mil, eh. Yesterday I got two letters from HMRC. One to tell me my codes for the year ahead and another with very large font telling me I had underpaid my taxes… by £50. That’s down to a quirk with the timing of my income, but the letter was impressive – if you owe them a lot, even more so. Nonetheless, the squeeze is on.
And the madness is undiminished. When we could have a had a local mine for the only blast furnaces left what did Miliband do? He made sure the project was stillborn and now the Navy has to escort in, er, American coal. But that’s not all…
“Another Chinese firm could take over British Steel, says minister”
https://www.telegraph.co.uk/politics/2025/04/15/british-steel-latest-news-jonathan-reynolds-sarah-jones/
Nobody mentions the elephant in the room… net zero; although they do say energy costs must come down, they never say how that can be done. And it really is so very obvious.
This raised a chuckle:
“Rightwing media falsely blame Ed Miliband for UK steel crisis, experts say”
https://www.theguardian.com/business/2025/apr/14/rightwing-media-blames-ed-miliband-uk-steel-crisis-net-zero
Experts? NGO types. So, if you dare to criticise Miliband and his mad ideas you are right wing.
Childish stuff.
Anything from the Guardian can be ignored. The Tories, of course, share the blame for net-zero madness. They were content to let the last blast furnaces in South Wales be shut down. But when a Tory MP (who did at least admit to his own party’s contribution to the situation at the Scunthorpe steel plant) stood up last week and pointed out that the panic measures to get coal to the plant were just papering over the cracks and that the high cost of energy imposed on UK industries were also a big problem, the denial from the government ranks was palpable.
Others have pointed out that the recall of Parliament last Saturday was pure theatre. The government could have arranged the necessary sitting to pass emergency legislation before Saturday.
“Anything from the Guardian can be ignored. “
There is the humour factor, Dave. Don’t be such a killjoy. 6th formers can be very funny especially when they think they are the intelligentsia.
There was never any need for a recall of Parliament, but it is theatrical and Starmer likes a Panto.
Yes, clearly more gevernment subsidy will save industries and bring prosperity. I should subscribe to the Guardian. I am not twisting my thoughts correctly.
Why does this sound like some insurance agent selling life insurance to someone with no living heirs or others he wants to make rich off his/her death. “Think of it as an emergency savings that you can cash in if you ever need the money!”
(I used to manage insurance agents and I’ve seen it all.)
It amounts to Green racketeering. “Nice grid you’ve got there. It’d be a shame if something were to happen to it.”
Seriously, blink and you’ll miss some of the lunacy. GB Energy Update
“Miliband’s outfit wants an “HR Business Partner” for £62,475 to oversee “talent management, diversity and inclusion, overseeing complex HR casework and change management and HR policies.” They will act as a “change agent” to “ensure that the transition of GBE from DESNZ is supported with robust people change plans.”
…
A key role is also to “be an advocate for D&I, ensuring the strategy is embedded, action plans are in place and that leaders are champions of inclusivity.” On top of the £62,000 the HR D&I manager gets £15,963 to a gold-plated Civil Service defined benefit pension. “
https://order-order.com/2025/04/15/gb-energy-hiring-62000-hr-manager-to-be-advocate-for-di/
A Two-Tier Production
This report triggered me to write to my (Labour Party) MP asking when I’m going to see a £300 reduction in my energy bill. I listed 11 points why it wasn’t going to be possible. Including how much electricity has been imported by the interconnectors since Two Tier took the helm which is surprisingly large.
I don’t expect a reply from him as he hasn’t to previous communications
It’s healthy to let off steam at least, Ben.
God knows my outrage-ometer has been spinning faster than a pulsar since Christmas.
This helps…. especially at 3:20
If we have to pay wind generators when they can’t sell the electricity (potentially) generated due to problems caused by lack of grid capacity, then the next step will be to pay the car manufacturers for the EVs that they (potentially) can’t make due to lack of demand.
If wind/subsidy (delete according to preference) farmers expect to be paid for producing their product at a time that they can’t sell it, perhaps they should also pay the other generators who have to step in when they can’t produce any product to sell when it’s needed.
A concise thought.
“paid for producing their product at a time that they can’t sell it”
That is not when curtailment is paid. That comes when someone has bought their product, and the grid is too congested to deliver it.
If you send any product, and the shipping firm that you have contracted can’t deliver, you will expect compensation.
If you produce a product and haven’t found out whether there is a means of delivery to the consumer then more fool you.
It’s common practice. Plenty of courier services offer guaranteed delivery schedules and penalty payments if they’re not met. Same thing.
Off topic- sorry.
UK climate minister’s COLOSSAL carbon footprint | MGUY Australia
Get paid whether your customers need your product or not.
What a scam.
He bought the Post Office to make sure no delay in the subsidy payments.
This is far from the worst recent example, but we are seeing solar surpluses driving day ahead prices into heavily negative territory right across Europe in the middle of the day. Because most solar is not controlled by grids it results in wind being curtailed in its place. There is nowhere to export surpluses to, because everywhere has one. Expect this all spring and summer. All the extra solar installed because of the energy crisis is going to prove uneconomic.
Already the Dutch are moving to charge domestic solar installations if they wish to export.
Insanity like this can only happen if government is involved, remove government and sanity is restored with the added bonus that wind and solar suffer a well deserved death.
And on calm days, they’ll still be none.