‘Constraint payments’ are made to energy generators at times of low demand. When there is a surplus of power in the National Grid, generators are paid at a pre-agreed rate to shut down until power demand increases. Constraint payments act as compensation for revenue lost from ceasing to generate and supply power.
Beneficiaries of constraint payments include generators of non-baseload electricity, such wind and wave farmers (who depend on unpredictable natural elements to enable them to produce power for sale to the network) and high-demand, peak-supply-only generators such as quick-fired gas-fuelled power stations.
As reported the Scottish Energy News earlier this month, Niall Stuart, Chief Executive, Scottish Renewables, wrote to National Grid demanding that the company publish a regular breakdown of payments to all forms of electricity generation, not just wind farmers.
He said: “Total constraint payments were equal to £161.2m and the cost of constraining wind was £23.3m, meaning that coal, gas and other generators received £137.9m – six times the amount paid to wind. Despite this, National Grid only publishes detailed figures on payments to wind, with no breakdown given for the other sectors.”
A spokesman for National Grid said: “In the last financial year, £28 million was paid out to wind energy generators in constraint payments, whilst in total £138 million in constraint payments was paid out to coal, gas and other generators – almost six times as much.
“No breakdown of these costs has ever been published, making it impossible to accurately state how much in constraint payments has been paid out to any form of energy generation technology apart from wind.
“Following their contact with Scottish Renewables, the National Grid has now confirmed that they have agreed to publish breakdown cost of constraint payments for other forms of energy generation. The first publication of this information is expected before the end of February.”
The Grid spokesman also made the point that until now it had only ever been wind energy constraint payment information that anyone had requested. He said:
“This rather revealing comment suggests that articles on constraint payments in many mainstream media publications have been motivated by an anti-wind energy sentiment rather than an urge to seriously examine the issue of constraint payments and the true cost of the various forms of energy generation which supply the National Grid.
“We have now discussed this issue with Scottish Renewables and we are more than happy to meet their request in full. It’s vital that we provide clear information about how we constrain energy generation to balance the power grid.”