Vast wind farm using loophole to ‘cash in on cost of living crisis’

SCOTLAND’S largest wind farm is using a net zero loophole to exploit the cost of living crisis, government sources have suggested.

Ministers are planning to tighten rules over contracts with wind farms as they ordered talks with Moray East, after it emerged owners were making profits from record energy prices instead of repaying Treasury subsidies.

The Government provides wind farm producers a guaranteed price for their electricity in order to stimulate the development of renewable energy.

But some developers are choosing to sell freely on the wholesale market during record energy prices to avoid returning potentially tens of millions of pounds in profits to the taxpayer.

Kwasi Kwarteng, the Business Secretary, believes developers acting in this way are “undermining the renewables scheme and not behaving within its spirit”, a source said. Moray East, which became fully operational last month, agreed a price of £57.50 per megawatt hour with the Government for its electricity. But it has delayed the start of its contract for 12 months, meaning it will instead receive the wholesale price, which last week hit £95.10 per megawatt hour, and avoid having to pay the difference back.

‘Wind farm projects will not receive payments while they are generating on market terms’

The fully operational Triton Knoll wind farm off the coast of Lincolnshire has also delayed the contract for its third phase.

The Government will now review the design of new contracts to try and avoid the loophole being exploited again.

“The Contracts for Difference (CFD) scheme incentivises private investment in clean, home-grown energy and has driven down the price of offshore wind by 65 per cent,” a government spokesman said: “Projects will not receive payments while they are generating on market terms, and ministers keep the scheme under review to ensure value for money for consumers.”

A spokesman for Moray East said it was “on course to sign its CFD within the contractual terms set by the process”.

A spokesman for Triton Knoll owners RWE, J-power and Kansai Electric Power, told The Times it was working within the terms of the contract which allowed the company “to vary the start date, enabling a project to allow for delays and losses incurred during the construction process”.

The move by wind farms is within the rules drawn up in 2017 as Whitehall officials did not predict a gas price spike.

Overall energy costs have risen as Britain generates about a third of its electricity from burning natural gas.