As the Covid-19 pandemic hits energy demand across the UK, the National Grid has issued a warning to UK power plants as well as wind farms that they may be asked to switch off. It is required to prevent the network from being overwhelmed by an oversupply of electricity as demand continues to fall.
Falling demand amid the coronavirus
According to the data recorded by UK operators, demand has dropped by over 10% in the last few weeks. If the coronavirus pandemic continues, then it could go down further by 20% in the coming summer months.
As per the National Grid, the fall in demand is primarily due to the decreased energy consumption by commerce and industry sectors. This decrease is significantly higher than the spike in domestic use as people continue to stay indoors due to the lockdown measures.
In the National Grid’s Sumer Outlook report, it is stated that if the demand for electricity in the summer continues to be lower than in previous years, then more measures would be needed for balancing and operating the power system. One of the significant actions that the National Grid can take t stabilise the network is to decrease the electricity from flexible wind output.
The National Grid may also reduce interconnector import levels or come with a local or nationwide Negative Reserve Active Power Margin or NRAPM. It is a way for the National Grid to inform power stations that outputs would have to be decreased to retain the safety margins. Management of lower electricity demands is as crucial as managing the peak demand.
Constraint Payment to Wind Farm Operators
The UK government has awarded over £12 million to wind farm operators as compensation for turning off their turbines. According to figures released by the Renewable Energy Foundation (REF), the total of such constraint payments by the UK government has crossed the £650-million mark. It has been paid to them over the last decade to discard 8.7 TWh of electricity.
In some instances, wind farms have made more money for switching off power than producing it.
In 2010, the UK government’s “Connect and Management” regulatory framework came into fruition, supporting the development of projects for electricity generation and the connection with the nation’s transmission system.
The National Grid, a private company that functions as Great Britain’s Electricity System Operator (ESO), is tasked with the identification of shortages and surges. It also has to balance the demand and supply accordingly.
Justification of constraint payments and who funds them?
A spokesperson from the REF says that there is reason to believe that this practise can lead to companies finding it more profitable to work in low-demand areas and those with weaker connectivity to the grid. It allows them more opportunities to gain from constraint payments by constructing wind farms in such places.
However, that is not the complete picture. If a wind farm is asked to bring down its output, it also loses several subsidies, including the Levy Exemption Certificates.
Thus, the constraint payments are a way to compensate for such losses as well. According to the NGESO, paying constraint costs is considerably cheaper than upgrading the nation’s grid to prevent overloading and related issues.
In 2017, Ofgem also came up with the Transmission Constraint Licence Condition, which focuses on preventing misuse of these funds. At present, the United Kingdom is operating with 57GW of power generated by wind farms. Plans to increase this capacity over time are already in the implementation phase.
An expansion of the grid for interconnector enhancement and management of increased capacity is even more crucial for the coming years.
As the coronavirus pandemic continues, demand for electricity will fall in the coming months. Wind farms are looking at more prolonged periods of low-power generation and constraint payments. While a similar situation in Scotland is becoming a concern, it is essential that the UK government takes notice of the same and plan an expansion of the grid to reduce such payments in the future.