Constraint Payments

Posted Category: News

Brief explanation why wind generation constraint payments are not the same
as other generation payments.
When confronted with the scandalous cost of constraint payments to windfarms when their
generation is surplus to requirement, the wind industry correctly points out that all generation
technologies are constrained off from time to time and are all compensated for their losses by
National Grid (NG). But that is not the whole story. National Grid (NG) balances supply and
demand for electrical power. The daytime/night-time, weekday/weekend, summer/winter etc
fluctuations are largely self-regulated, which means that if there is to be no demand then the
electricity is not generated. NG does the fine tuning second by second by asking for more or less
generation and either paying for it or compensating for a generator’s lost sale of electricity when
it is asked to shut down. Constrained off oil, coal or gas generators then give NG a rebate for the
saving on fuel. Constrained off wind generators lose the sale of electricity but also lose their
subsidy worth about as much again as the cost of the electricity and need to be compensated for
this loss. That is only fair and reasonable. However, that makes wind about twice as expensive as
other technologies and NG also has to balance its books so NG never chooses voluntarily to
constrain off wind energy for routine balancing of the grid. In practice, wind is only constrained
off if NG has to deal with an excess of generation and has exhausted all cheaper options. This
puts the wind generators in a very favourable negotiating position because NG cannot allow
excess wind generation to destabilise the system. The outcome is always a payment to the wind
generator well in excess of his losses. This form of doing business is normally referred to as
ransom or blackmail, but it is legitimate. Don’t blame the wind generators blame the politicians,
blind and deaf to science and engineering, who allowed generators to connect to the Grid years
before the necessary upgrades were completed with the inevitable result that we, the people
supposedly served by our politicians, pay for it.
Stuart Young
5th May 2016

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