There has been an interesting exchange of views about windfarm constrain payments in recent days. Last week, the Telegraph reported that three windfarms had been received £11 million to switch off, prompting a mealy-mouthed response from DECC.
Constraint payments are nothing new. National Grid has been paying coal and gas generators - and others - to change their planned output well before wind farms joined the mix.
These payments are made when power cannot be transmitted to where it is needed, usually due to congestion at a certain point on the network. When this happens, National Grid needs to take action to ‘balance’ energy supply and demand, and ensure the lights stay on.
The payments are made on a competitive bid basis to ensure that these costs are as low as possible. But when constraint costs would be higher than the cost of building new network capacity, those network reinforcements are being made instead.
We tightened the rules in 2012 so generators cannot profit unfairly during constraint periods. Since then, prices paid to generators to curtail wind have more than halved.
The suggestion that constraint payments are not new is true. I think it's also true to say that it's also cynically misleading. As I understand it, in a traditional windfarm-free grid, you sometimes can't get the power from plant A to where it is needed and so you have to get plant B to generate instead. You give plant B a payment ("constraining on") in compensation and plant A doesn't operate.
In a wind-farm corrupted grid, the situation is different. Say that plant A is a windfarm and plant B is a conventional gas-fired station. Although plant B still gets a payment to constrain on, when the decision is take to have plant A switch off, the operators have lost all their subsidy payments as well as their income from electricity sales. The grid therefore offers compensation payments ("constraining off") to the operator for this. Indeed, as the Renewable Energy Foundation point out, constraint payments are often worth more to windfarm operators than the whole irritating business of actually generating power. The effect is that the consumer ends up paying twice: once to have a conventional generator actually make electricity and once to have the windfarm not make it.
It's worth remembering this next time someone tells you the energy companies are ripping you off. They may well be. But they are doing so with the full connivance of the political classes.