Compensation payments to Wind Farms?

Last night there was an interesting piece on BBC Scotland. I have been interested in the Wind farm and renewables debate it’s a very debatable subject for many and interesting to see the reaction by many of both sides of the discussion.

Comment W.W. W

It’s because of the way power is contracted to the grid, and not unique to wind, The companies have to provide a certain capacity, or they don’t get paid (or get fined). But if the grid decide they don’t need that much power, they need to cut production.

The companies have invested in capacity to produce, so if they are told to stop producing, they are compensated for it. Otherwise they have to invest all their money for when we need it, but could be told to turn everything off and not get paid.

Not all that different from booking a hotel and having a cancellation fee/non-returnable deposit: the hotel had the room for you, couldn’t sell the capacity to anyone else, so you still have to pay even though you don’t use it.

If the UK only had precisely enough capacity to meet needs, there would be no flexibility for production to raise if consumption rose, nor any resilience for when something went wrong.

The more peculiar bit is that because the renewable producers are easier to turn off, they are cheaper to have turned off vs a bigger power station. This is where I think it’s more contentious, because effectively we have incentivised not using the most environmentally friendly sources of electricity.

I fully understand that we need move away from fossil fuels to renewable energy. To me it’s sad that very few in power looked into the future of Energy use and other ways planned for our future!

I know little about it but it is also incredible that the land owners get so much to rent their land for the wind farms. Also so much is made abroad including turbines also so much investment also from abroad the profits are mainly paid for out of our Electricity bills.

Why did we not try to have a Green Bond issued to build Wind farms. Many will say it was to risky but it looks like the companies who own them cannot lose with the compensation payments?

In my view I feel that should be classified as an energy producers’ risk and not compensated at all.

I have some interesting comments on the subject please feel welcome to add disagree with them?

W.W.W – Put it the other way: if someone wanted to convince you to put a lot of money into a project, which might take years to pay back its investment, let alone make profits, you might go for it as a long-term thing. If they told you that you had to go ahead and put your money in, but they might not pay you as much as you had costed your whole plan on, because periodically they could decide not to use your very expensive equipment, you might not invest at all. Or you might demand a higher price for the energy to mitigate the risk of being told to turn off against your will.

Via electricity bills, we will pay these costs irrespective: if they didn’t come as a payback for generation capacity being turned off, we would pay higher price per kWh. In a nationalised system, the cost of running all the generation capacity might even out across all locations and types, but the cost of paying for redundancy would still be there, only more opaque.

Steve – Equally as interesting is how much landowners get paid for having a wind farm on their land – they don’t have to actually do anything apart from giving their permission – the power generator does everything else 😳

Chris – It’s better than burning fossil fuels, and probably won’t settle down until it’s all renewable energy. A small price to pay in the long run?

Angus – Smart meters should allow consumers to be alerted and given the opportunity to use that electricity for free instead of paying the companies, could be used for storage heating etc.

Dave – Angus, the future, for example you plug your car in to charge with a requirement for it to be charged fully by 08:00. When that charging takes placed would be controlled by demand v’s generation. Some way of that level of integration yet though.

Paul – Unfortunately the floodgates were opened by the Scottish government, encouraging foreign business to take advantage of the uk energy market. You’ll understand why they love us when we pay higher rates for each kw generated than any other country. As an example the farm I used to work on was Norwegian but the background funding was Chinese. The operators are also quite happy to reduce generation and increase maintenance opportunities, particularly when the energy prices are low. Other consideration are that the farms in moray and Aberdeenshire will only cater for reasonably local use. The uk national grid doesn’t stretch to Scotland and isn’t particularly suited to imbalanced power inputs like wind farms. Not yet anyway. Plus, take a look at the proposed power links to France, Norway etc

Paul – This isn’t unique to wind, all generation essentially receives non generation payments, other wise nobody could develop anything with any certainty of a return. There are many issues but this probably isn’t the one to worry about!

About heavywhalley.MBE

Mountain Rescue Specialist. Environmentalist. Spent 37 years with RAF Mountain Rescue and 3 years with a civilian Team . Still an active Mountaineer and loves the wild places.
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