Ofgem And The National Grid

Next month Ofgem are due to publish a consultation document which will show the cost of feeding the north of Scotland's renewable energy into the national power grid could fall by 80%.  The costs are estimated in a draft pricing and investment model.

It suggests the access charge for wind and marine power from the north of Scotland would fall from £24 per kilowatt to less than £5. Currently a sliding scale of charges show those in the south of Scotland pay around £12 per kilowatt and in much of the south of England there is a subsidy of more than £6 per kilowatt.

The draft report shows how the cost per kilowatt in the north and north-west of Scotland would fall from £24 to less than £5 if the cost of accessing the grid was equally spread.  If it was equalised not to support renewable power but new build gas-powered electricity generation, the unit cost would be £12 throughout Britain.  Sounds good so far.

One of my readers, Joe Public, brought this to my attention and sent me his comments:

My own view about the Ofgem report is that there's a lot of political pressure being exerted. 

It's all very well for the powers-that-be (no pun intended) to complain about Access Charges to be £24/kW for generation from the north of Scotland, but they conveniently ignore the fact that those points of generation are very distant from the actual 'average' market. 

1. It's only right & fair that Transmission Costs (distance-related) apply. Electricity (unlike Natural Gas from the North Sea) is not very efficient to transmit over distance. Therefore the Access Charge for electricity generated much closer to the point of demand must be far lower.

2. Unreliable power sources such as wind & solar need virtually 100% conventional power generation as back-up. 

No-one, anywhere in Scotland, would depend upon wind or solar to power a hospital, because it has zero critical dependency.

3. The emotive statement in the Beeb's article "Sharing the costs equally across the UK would remove the financial incentives to build any new nuclear power stations, and shift a projected £17bn of nuclear investment to other technologies." really means getting every electricity-user (pensioners & those on the bread-line included) in the UK to further subsidise those investors already receiving massive feed-in tariffs for what electricity they generate. [And in some cases electricity generated for which there's no immediate demand.]

4. The Beeb's article seems to imply its an either/or scenario - (nice, green, clean) wind +solar vs (nasty, polluting) nuclear. Conveniently ignoring the fact that only the latter is 24/7/365 reliable.

Joe isn't pro-nuclear but he's aware we need power to be dependable and affordable. If Scotland is to be the 'renewable power house of Europe' then we have much to do to achieve a reasonable balance between price and reliability.

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Wind Robbery

Our utility bills are to rise, of that there is no doubt and there is also no doubt that hidden within our bills is a charge towards green energy.  I think energy companies purposefully make their billing system complex to confuse the average consumer and thus they have been able to include green taxes without much public outcry.

But you can, according to moneysupermarket, switch to a green energy tariff which I presume would give intricate detail. Be aware if you switch that:

By switching to green energy you are likely to be spending more money. However, you will also be making a statement that you support renewable energy. If enough people make the switch then this could help to convince the Government to offer support to the industry.

Who could refuse such an invitation?

The global warmers or climate changers have been silent since recent climate scientists have published material which disproves their assessments that the world is becoming warmer, but politicians continue to stagger down the renewable path- a path lined with wind turbines.

This week Alex Salmond attended the official opening of two new wind farms in South Ayrshire.  He is determined that Scotland generates all electricity from renewable sources by 2020 - but he never mentions the cost to the consumer.

Wind turbines don't work in winter when ice and lack of wind render them redundant most of the time.  That being the case they should be at their peak on spring, breezy days.  They are. Research by the Renewable Energy Foundation (REF) and a must read, shows the constraint payments made to contracted power stations that agree to stop generating in order to stabilize the network.  A constraint happens when the National Grid is unable to absorb all the electricity being generated and those contracted to generate must be asked to stand down.

One occasion was during the first week of April when a number of Scottish wind farm contractors received payments - in some cases as high as 20 times the value of the electricity which would have otherwise been generated.  In total approximately £890,000 was paid over a few hours to six wind farms and these costs will ultimately be passed on to the consumer. Wind farms are subsidised to the tune of £50-£55 per MWh but the National Grid, although obliged to pay to reduce output, has no standard MWh rate.  The graphic shows the Farr wind farm was paid £800 per MWh to reduce output in April, nearly 16 times the value of the subsidy foregone.

The single most expensive day in terms of payouts was 24 May when seven wind farms were shut down for a total of 69 hours with a compensation payout of £613,000.  Turbines were switched off again on 1 and 2 June but that cost has yet to be calculated.

John Swinney showed great angst at Scottish Power's announcement last week that bills were to rise roughly 15%.  SP insisted it was the cost of oil which was responsible.  Not a word about this exorbitant waste of power and the financial cost to end-users. Is it any wonder when these few days have cost Scottish consumers £1,503,000.

For years Scotland has paid highly to connect to the National Grid but politicians have been unable to resolve the issue. This is too serious a matter not to have been resolved before we started erecting wind farms throughout the countryside under the pretext that we would be self-efficient in power within 10 years. We may be self-sufficient but why are we throwing away valuable power and allowing wind farm owners/suppliers to rob us blind?

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Scotland v the National Grid

There was a debate in the Scottish Parliament yesterday afternoon about the charges Scotland pays to connect to the National Grid.

Many of my non-Scotland domiciled readers may not know that electricity produced not far from me here can cost me far more per kilowatt than it can someone who lives in the south-east of England.

Scottish electricity industry leaders are demanding an end to the 'unfair' practice and say the costs may cause some renewable electricity generation projects to be delayed or abandoned.

Transmission charges on electricity generators pay for the cost of the national electricity grid. They vary according to how far a power source is located from the main centre of demand, which is London.

In the north of Scotland, generators are charged £20.08p per kilowatt but in Central London a power source receives a subsidy of £6.41p per kilowatt. Subsidies are payable across most of southern England.

The National Grid argues that the differentials encourage companies to locate power plants close to demand centres, cutting the costs of the national transmission network and reducing consumers' bills. They also argue that stronger winds in northern Scotland meant that wind farms there generated more power than their southern counterparts and so could afford to pay the higher transmission changes. It said that of 20,000 megawatts of planned British renewable generating capacity, 9,000 megawatts was in Scotland.

Let me get this right. Because we generate excess power here in Scotland and decide to send it south to England we should be penalised. That is what the NG is saying surely. That is grossly unfair.

A couple of years ago the SNP were reported to be drawing up plans to build the world's longest electricity connector to Norway. Surely if we can get this project off the ground then we will be able to negotiate a better deal for Scottish consumers.

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