Why are we spending millions paying windfarms to switch off?
To ensure the secure operation of the electricity system, National Grid takes over a thousand actions each day to balance supply and demand, including paying generators to alter their output. This is a normal part of our market system, and the arrangement existed long before wind farms were connected to the grid. National Grid is incentivised by Ofgem to ensure this is carried out in the most cost effective way.
Less than 10% of all constraint payments are made to wind farms. Most are made to conventional generators such as coal and gas. The impact on a typical consumer bill of constraint payments to wind farms is no more than a few pence per year.
No generator of any type should receive an excessive benefit from constraint payments. That is why the Government is currently consulting on the introduction of a Transmission Constraint Licence Condition later this year to help ensure we don’t encounter problems in the balancing market when normal competition amongst generators is distorted by transmission constraints. Planned upgrades to the most congested parts of the transmission system are also underway which will help ease constraints. The upgrades will begin to take effect from 2013.