Dodgy wind turbine bludgers

It is astonishing what behaviours are created by subsidies. Bludgers crawl out of the woodwork with all sorts of schemes especially when it comes to green power rorts.

Occasionally, one comes across a story so mind-blowingly unexpected and out-of-left-field that it seems hard for readers to take on board that it is true. Such is the story I first reported here last month, under the heading, “Our lights will stay on, but it’ll cost us a fortune”, about the scheme being devised by the National Grid to solve what has long been the most intractable problem created by the Government’s plan to see the best part of £110 billion spent in seven years on building tens of thousands more wind turbines – namely, how to keep our national grid “balanced” when it has to cope with all those unpredictably wild fluctuations in the speed of the wind. 

The answer National Grid has come up with, only made possible by the latest computer technology and “cloud software”, is to hook up thousands of diesel generators, remotely controlled by the grid, to provide almost instantly available back-up for when the wind drops. As we can see from recent reports, such as the National Grid’s draft consultation on “Demand Side Balancing Reserve and Supplemental Balancing Reserve”, this is now taking off into the weirdest and most ambitious scheme yet called into being by our politicians’ obsession with wind turbines. As uncovered by the tireless research of my colleague, Richard North, on his EU Referendum blog, owners of diesel generators are being incentivised with offers of astronomic fees to make them available to the grid – subsidies equivalent to up to 12 times the going rate for conventional electricity, and even, on very rare occasions, up to £15,000 per megawatt hour (MWh), or 300 times the normal rate of £50 per MWh.

Initially, this “short-term operating reserve” only envisaged relying on existing standby generators, many owned by public bodies such as hospitals, prisons and military installations – which stand to earn hundreds of millions of pounds from the Government, paid for by the rest of us as a “stealth tax” through our electricity bills. But so lucrative is the subsidy bonanza now being proposed that dozens of private firms, with names such as Renewable Energy Generation and Power Balancing Services, are flocking to cash in by building dedicated “virtual power stations”, capable of generating up to 20MW or more, knowing that they can expect up to £47,000 a year in “availability payments” for each MW of capacity, even before they have generated a single unit of power.

Right so the green energy of wind turbines needs the backup of thousands of fossil fuel burning generators in order to smooth out the times when there is no power generated.

Yeah that’s working a treat.


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  • peterwn

    Presumably the cost of this fallback is not included in the cost estimates when making a case for a windpower scheme.

    There is a similar ‘scheme’ in NZ to deal with hydro station ‘dry years’, but its operation is much simpler. As it deals with an energy shortfall rather than peak demand shortfall, no complex technology is needed, it can be negotiated and got going via telephone, emails etc as time is not of the essence. It does make sense in the NZ context for the larger embedded generation units (eg some of Fonterra’s ones) to be included as part of the electricity market and be available for ‘dispatch’ if not already running.

    One ‘rort’ that occurs with embedded generation (including solar panels) is when the market is forced to buy back surplus production at normal tariffs (ie effectively allowing a meter to run backwards) The problem for the market is at the times the customer has surplus power, the market does not want or need it at that price.