UK Renewable Energy Firms are Being Paid Huge Sums to Not Provide Power

The U.K. electricity grid "was built to deliver power generated by coal and gas plants near the country's major cities and towns," reports the BBC, "and doesn't always have sufficient capacity in the wires that carry electricity around the country to get the new renewable electricity generated way out in the wild seas and rural areas.

"And this has major consequences." The way the system currently works means a company like Ocean Winds gets what are effectively compensation payments if the system can't take the power its wind turbines are generating and it has to turn down its output. It means Ocean winds was paid £72,000 [nearly $100,000 USD] not to generate power from its wind farms in the Moray Firth during a half-hour period on 3 June because the system was overloaded — one of a number of occasions output was restricted that day. At the same time, 44 miles (70km) east of London, the Grain gas-fired power station on the Thames Estuary was paid £43,000 to provide more electricity.

Payments like that happen virtually every day. Seagreen, Scotland's largest wind farm, was paid £65 million last year to restrict its output 71% of the time, according to analysis by Octopus Energy. Balancing the grid in this way has already cost the country more than £500 million this year alone, the company's analysis shows. The total could reach almost £8bn a year by 2030, warns the National Electricity System Operator (NESO), the body in charge of the electricity network. It's pushing up all our energy bills and calling into question the government's promise that net zero would end up delivering cheaper electricity... the potential for renewables to deliver lower costs just isn't coming through to consumers.

Renewables now generate more than half the country's electricity, but because of the limits to how much electricity can be moved around the system, even on windy days some gas generation is almost always needed to top the system up. And because gas tends to be more expensive, it sets the wholesale price.
The UK government is now considering smaller regional markets, so wind companies "would have to sell that spare power to local people instead of into a national market. The theory is prices would fall dramatically — on some days Scottish customers might even get their electricity for free...

"Supporters argue that it would attract energy-intensive businesses such as data centres, chemical companies and other manufacturing industries."

Failure of their payment structure

[XXongo]

Clearly their payment structure is badly screwed up. They shouldn't be paying for power they can't receive.

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[Gravis Zero]

They shouldn't be paying for power they can't receive.

This would give the grid operator the ability to choke companies that they don't like and effectively put them out of business.

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[Z00L00K]

The gap that you need fill in is the issue here - renewables are producing energy in a varying volume that can't be controlled aside from shutting off the production.

Power plants like coal and nuclear are slow to change. They can produce a steady continuous power that can change slowly. With water power plants you can change the power production faster and compensate to some extent for variations from the renewables.

However the grid is the big problem - it's dimensioned and designed for a few large producti

Re:

[Epeeist]

Clearly their payment structure is badly screwed up.

This isn't the principle screw-up. If a non-renewable source, say gas, kicks in for a charging period, then the whole of the electricity price for that period is determined by the gas price, rather than just the percentage of energy that it produces.

Stationary Grid Battery

[GooberPyle]

The fastest solution is to build a few batteries and not NMC; use LFP or sodium. Someone could turn a profit doing that. Don't they have power engineers in the UK?

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[Gandoron]

Lots of gravity battery options, including dams.

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[Jeremi]

Yes, excess energy that the grid can't accept should be stored [interestin...eering.com] for later use when possible, or perhaps used to generate hydrogen (or synthesize gasoline or whatever fuel is most appropriate) for resale.

Re: Stationary Grid Battery

[ihavesaxwithcollies]

No, just magical nannies and chimney sweepers.

Re:

[techno-vampire]

Not just that, they have nuns [wikipedia.org] who moonlight as forensic specialists for the local constabulary.

Multiple problems combining

[BrightCandle]

There is a few problems combining to cause this issue. The first is that in order to get Wind farms to be made capital owners are requiring a minimum price for a MWH to ensure their costs will be covered. That isn't unreasonable given government wants them built but one of the reasons is because the grid isn't actually available yet with sufficient capacity to take their power but government still wants the farm built. So a compensation deal is agreed. The various grid companies across the country are ridiculously slow in building out infrastructure, their backlog for projects goes into 2045 and they haven't expanded their capacity to compensate so even though the Wind farms are getting built and connected its often with lines not sufficient to take all their power at peak. The issue goes further than that because there are multiple companies and there is a lot of issues cross connecting the country. Scotland has lots of wind farms but no where near enough connection to England to pass the power down, so for large periods of time there is just excess wind in Scotland that no one can use and its the border between different grid companies so hence no ones fault. This backlog is also causing big issues with companies that want to install Solar too, they require permission from the grid and they aren't getting it. Since pricing is done across the country as a single price what often happens is sufficient power is available but it turns out it can't actually be transferred so they end up bringing the gas turbines online, the algorithm doesn't take account of the limitations of grid transfer. If it did then batteries would make a lot of sense and could be used to reduce some of the problem and store the power excess but the incentives for that are all misaligned at the moment and again battery requires the national grid companies to connect them and a lot of battery projects are stuck in that backlog. So the end result is paying for wind turbines to curtail while also paying for gas turbines, because the power can't be transferred from where its made to where its used and like all the private companies in the UK they are all about maximising profits and don't care if it brings the country to its knees doing it.

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[dannybackx]

Other countries, similar problems.
I also see two problems you don't mention.
- "They" are in part ridiculously slow because they didn't start investing when they should have, going for shareholder dividends instead.
- Politicians are unable to understand and/or care about such a long term problem.

Working as planned then?

[MacMann]

I'm not sure this is a problem as it appears the goal of the current payment structure was to incentivize the building of new infrastructure.

If there's an abundance of wind power in Scotland (or wherever) to the point the people running the wind farm are getting paid millions of pounds per year to curtail output then that should drive someone to build more power lines, more batteries or other storage, or move factories or other energy sinks to the area. The issue doesn't appear to be that there's payment

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[Zocalo]

build more power lines,

That's the crux of the problem. The UK's grid was built when large carbon-fueled power stations were king, and so the distribution network is essentially a hub-and-spoke design radiating out from those to the end users, with the load carrying capacity getting smaller and smaller as you go. That means by the time you get to the rural fringes, like Scotland and Cornwall/Devon, which is where a lot of the optimal offshore wind sites are, the grid simply does not have the capacity to