How nuclear power is switching off windfarms in Scotland – The truth about wind power compensation payments

Summary:

This report investigates the extent to which the operation of nuclear power plant in Scotland can be blamed for the large amounts spent on compensating windfarms for being asked by the National Grid to shut down production. These shutdowns are done in order to stop the electricity network from being overloaded and the payments to windfarms are called ‘constraint payments’. This is an important issue as the compensation payments made to windfarm operators are large and are borne by electricity consumers.

Unfortunately, the compensation payments  are regularly highlighted in anti-windfarm media reports. The practice of paying windfarms to cut back their energy production exists for different reasons, including shortcomings with the grid network. But a very big reason is simply the inability of nuclear facilities to operate flexibly.

Put simply, nuclear power is switching off windfarms in Scotland. Indeed it seems from this study that higher generation of nuclear power is associated with a higher proportion of wind power being switched off (given the comparison between 2017 and 2019 data).

This is an important issue for the future because the proportion of fluctuating renewable energy sources in our grid is growing. This means we will need increasingly flexible systems to balance renewable energy production. Yet the inflexible nature of nuclear power inhibits, and often prevents, efforts to do this. Windfarm compensation payments could be avoided if nuclear power stations were able to adjust their output to help balance renewable energy inputs. However, nuclear power plant are run at full capacity as much as possible and nuclear operators are reluctant, and in many cases technically unable, to ramp up and down to match fluctuations in grid requirements.

The Scottish electricity grid has not been successfully strengthened enough to deal with extra electricity production from the North of Scotland. Yet windfarm compensation payments could be avoided if nuclear power stations were able to adjust their output to help balance renewable energy inputs. Yet this is difficult for nuclear reactors to do and in practice they run at full capacity rather than ramp up and ramp down.

A leading company of energy consultants, Cornwall Insight were commissioned to estimate the quantity (in MWh) of closures of windfarm production (constraints) that could have been avoided had nuclear power plants in Scotland been shut during recent years. This allows us to estimate what might happen to windfarm compensation payments if nuclear power plant were able to operate as flexibly as wind farms, that is in being able to turn off production when required by the grid.

Two years were selected; 2019 as the most recent completed calendar year but when nuclear sources were partly shut down, and 2017 the most recent calendar year when both nuclear plants in Scotland (Hunterston B and Torness) were fully operational. Note: Cornwall Insight merely provided the data. The interpretation is our responsibility.

Results

It was found that, in 2017, 94 per cent worth of windfarm output that had been turned off (constrained) could have been generated had nuclear power plant not been operating. In 2019, 77 per cent of the windfarm output that had been turned off could have been generated if nuclear was not operating. More nuclear power was operating in 2017 compared to 2019. These results indicate a direct relationship between nuclear power and payments made to windfarms to shut down (be constrained).

Windfarm compensation payments in 2017 were close to £100 million, and around £130 million in 2019. It can thus be argued that the operation of nuclear power is associated with about £100 million each year paid in compensation to windfarm operators – ie the large bulk of windfarm compensation payments. The larger the proportion of nuclear generation, the higher the proportion of windfarm compensation payments can be associated with inflexible nuclear operation.

It is therefore inappropriate for wind power to be ”blamed” by the media for these compensation payments. In fact, it is more reasonable to point to the inflexible operation of nuclear power plants as the root cause. These plants either cannot or will not help to balance the grid in these circumstances, and this undermines renewable energy and certainly increases the costs of operating windfarms to the consumer.

The evidence in this report suggests that in the UK nuclear power never adjusts to help balance the grid, except in extreme circumstances where the National Grid has no other choice but to curb the operation of nuclear power plant in order to preserve grid integrity. However this is difficult to do quickly and usually the Grid has to give several weeks’ notice to nuclear operators.

This pattern of the failure of nuclear power in the UK to participate effectively in grid balancing has been entrenched in the system of contracts (contracts for difference – CfDs) awarded by Government to nuclear and renewable energy generators. The most recent contracts awarded to nuclear power and renewable energy, as issued to Hinkley Point C and offshore windfarms in 2017 and 2019, further insulate the inflexible balancing position of new nuclear power whilst at the same time reducing the ability of renewable energy plant to claim compensation for lost production – lost production that will strongly be associated with nuclear inflexibility.

Indeed, the Government proposes to increase this bias against fluctuating renewable energy sources in future contracts. Whereas EDF will always be paid the premium strike price for power generated (£92.50 in 2012 prices) windfarms will never be paid their premium strike price in times when wholesale power prices are negative.

Rather than cover up the inability of nuclear power to provide balanced services in an electricity system involving higher levels of renewable energy, the concept of ‘baseload power’ should be abandoned in favour of a system using 100% renewable energy to balance itself. This will involve storing renewable energy when generated in excess (and is therefore very cheap) so that it can be used when there is little wind or sun.

Storage in batteries in the increasing numbers of electric vehicles can be used to smooth out daily changes in renewable energy production whilst several emerging techniques are available to store renewable energy for much longer periods. Rather than prop up nuclear power the regulatory system should be reformed to create markets for greater system flexibility including the uptake of techniques to store fluctuating renewable energy sources for both short and longer term use. There is a growing choice of options for the long term storage of renewable energy, including technologies such as compressed air, ammonia, hydrogen, flow batteries and biogas.

You can see some press coverage for the report in Energy Voice ; Climate News Network also RenewEconomy

You can read the details of the analysis in the full report (6500 words) available below through the buy report option. Please  help us raise money to do further analysis and campaigning work by buying this report on how nuclear power is undermining windpower, and perhaps also by registering for our founding conference (it’s a webinar) on October 17th. Remember the fossil fuel and nuclear industries have massive funds at their disposal and at the moment there are very few groups overtly campaining for, and preparing the way for, a UK powered by 100 per cent renewable energy. 

 


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