Wind power has been doing well in the UK, especially offshore. But there are issues. The variability of renewable energy sources like wind and solar is not their only problem- pushing the full system costs of energy up, as I discussed in my last post. There are also curtailment costs incurred when local potential green power supply exceeds what can be delivered to consumers. For example, last year, SSE earned nearly £10 million in ‘constraint’ payments for unused wind power generated in Scotland, the vast majority from its Viking on-shore 103 turbine wind farm. It is not alone. For example, a Feature article in the Times (Jan 10th) noted that SSE’s Seagreen offshore wind farm off the East coast of Scotland has been paid to curtail output from it 114 turbines for 63% of the time.
In all, the Times report noted, curtailment cost consumers £1.5 bn last year and it said the fundamental problem was the ‘lack of cables’ to users- with wind farms mostly being in areas remote from major power demand centres. The problem is that it is very costly to build new grids – more costly than the constraint costs, at least in the short term. But as more wind farms are built, this issue has to be faced- as well as the issue of public resistance new grid links.
The costs of curtailment and also the need for grid upgrades are obviously issues in the Scottish Highlands but also elsewhere - East Anglia notably. The likely installation of a new large nuclear plant on the Suffolk coast won’t help – indeed it may worsen local wind curtailment grid congestion problems. Despite the fact that its power will costs more than wind power, it may have to be used to recoup it high capital cost, with its output getting priority even when and if new new grids are built.
So solving the curtailment problem won’t be easy or cheap: it’s all about major infrastructure changes. There are already some new grid link plans afoot, but they will be costly and take time to build. Indeed, Montel foresees UK onshore wind earnings falling by 28% by 2030 largely due to a risk of oversupply & curtailment. But as Montel says, avoiding that issue is not just about grids. Local battery storage , which is expanding rapidly at present as costs fall, is a possibly faster and maybe cheaper interim option- storing excess green power for distribution later when there is less congestion. Hydrogen, ammonia and liquid and compressed air storage are also newly emerging options
However, it does all add to system costs and that at a time when materials and construction costs are rising- pushing up wind technology costs. That has led to some delays , for example in relation to the Dogger bank extension, and retrenchment, for example for the planned Hornsea 4. However, some new offshore wind projects are getting the go ahead. For example, a 1GW Five Estuaries offshore project, an extension to the 350MW Galloper Wind Farm off East Anglia, has got planning permission. Installation of the 79 turbines is due from 2027, with a 2030 start up.
And the new CfD round for offshore wind (just out) seems to have been a success, with 8.4GW of new offshore wind projects (12 in all) getting support, with an average strike price of £90.91m, including two very large (1.5 GW) projects. There had been worries and warnings about the offshore wind funding level being too low- £900m for fixed-bottom projects. But after ‘careful consideration of the bids submitted by projects, with the budget increased to secure additional capacity that represents good value for households’, the offshore wind budget was increased to £1,790. And that seemed to work, getting significant capacity backed with a reasonable strike price.
Nevertheless, as the Guardian noted, it was higher than the £82/MWh that had been achieved in 2024. And the Tory Shadow energy secretary said, ‘wind power is not getting cheaper as promised. These are the highest prices that we have seen in a decade’. But Labour said the costs were much less than if fossil gas was used, and as Carbon Brief noting that this did seem to be the case, even if the balancing and curtailment costs are included, with most of the new projects being in areas with few network constraints, limiting system management costs.
Next, though, in the second part of the CfD, due out in February, come onshore wind and also solar capacity, which may get lower prices. £310m has been allocated for them with indicative administrative strike prices set at £92/MWh for onshore wind and £75/MWh for solar, and the actual prices achieved are likely to be lower- solar especially looks like doing well.
Longer term, moving to big new technology, there has been a proposal for a 2.5GW tidal lagoon formed by a 14-mile concrete arc off the coast of Somerset from Minehead to Watchet. That it’s claimed would only cost £11bn, much less/GW than the £40bn 3.2GW Hinkley Point C nuclear plant, which is currently being built in the same area. But, as with wind and Sizewell C, there may be grid congestions issues and conflicts. Certainly we can’t push ahead with big new supply projects like this without also building up the necessary enhanced grid and system balancing infrastructure- although tidal lagoons can be used for pumped storage of excess power…But that's quite speculative stuff.
No one said it was going to be easy to revamp the UK energy system fully using green tech, with curtailment costs and balancing issues now coming to the fore, along with opposition from those who back the old energy status quo. Green progressives claim that change will lead to more and better jobs and lower consumer costs, but not everyone is convinced. For example, although a progressive, in a recent rather grim article, James Meek looked in some detail at the situation in the North East, focusing on the Blyth area, which has seen a lot of offshore wind power investment. You might think that would mean green tech expansion plans would be welcome. But he found that there were doubts. The experience so far didn’t necessarily translate to support for green options- or for Labour. The area was now a Reform UK stronghold- and Reform is opposed not just to immigration, but also to most things green.
It may be harder to change things that we thought. Although that’s no reason not to try. As Carbon Brief has noted, renewables supplied more of the UK’s electricity than any other source last, making up 47% of the total, followed by gas (28%), nuclear (11%) and net imports (10%). And renewable planning approvals doubled last year. With new CfD showing what can be done, there is still all to play for. But, with new nuclear also pressing for funding (see my next post), it may not be easy to accelerate renewables fast.
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