Wind farms to be prevented from inflating prices

WIND farms face a crackdown on payments they get for powering down amid claims operators have been routinely overclaiming, pushing up energy bills for households in the process.

Tough new rules are to be introduced governing the multimillion-pound compensation payments that wind farm operators can claim when strong winds force them to disconnect their turbines from the electricity grid.

It follows an investigation launched on Thursday by Ofgem, the energy regulator, over allegations they routinely overclaim – adding millions of pounds to consumer bills.

Now the Electricity System Operator, formerly part of the National Grid, has said it wants to toughen up the rules governing their operations without waiting for the results of the investigation. It said the Grid Code, which governs the way energy producers behave, is too lax and must be tightened to minimise the risk of future fraud.

Both moves follow an investigation by Bloomberg, which alleged that wind farm operators had overstated the output of 40 UK wind farms by more than 10pc in an effort to win higher payouts.

The investigation relates to the “curtailment payments” system under which wind farm operators can be paid not to generate electricity when the national grid risks being overloaded.

Under the system, which typically kicks in on windy days, the grid operator pays some wind farms to switch off. Payments are based on estimates of how much power they would have generated had they been operating as normal.

Curtailment payments totalled £590m in 2023 and added £40 to the average household energy bill, according to research from Carbon Tracker. The system relies on the honesty of the

‘British energy generators must operate at the highest standards’

operators and Ofgem’s investigation centres on claims that wind farm operators routinely exaggerated their claims. Twenty seven operators over claimed by at least 20pc, Bloomberg’s investigation suggested.

Andrew Bowie, the junior energy minister, said: “It is completely unacceptable to overcharge for people’s bills. We will not stand for it. British energy generators must operate at the highest standards.”

Bloomberg’s analysis showed that EDF’s Fallago Rig wind farm near the Scottish border claimed it would generate 27.1pc more power than it did in the previous five-and-a-half-year period.

Fred Olsen Renewables’ Crystal Rig II wind farm said it would produce 35.5pc more energy than it delivered. Ventient Energy overstated the output at its Farr wind farm by 28.7pc.

EDF and Fred Olsen told Bloomberg they take regulatory compliance seriously and work with external forecasters to draw up output estimates. Ventient declined to comment.

An Ofgem spokesman said: “Ofgem is investigating the alleged behaviour and has already asked the Energy System Operator to look into this – they are responsible for the day to day running of the electricity grid and monitor the behaviour of energy market participants. Ofgem will work with the ESO to consider all the facts and if it finds evidence of egregious action or market abuse, enforcement action will follow.”

An ESO spokesman said it believed the code governing curtailment payments was too weak and needed to be tightened. They said: “Current industry codes do not strictly define how closely curtailment notifications should be followed. We are currently undertaking a piece of work to bring forward a more suitable definition for this section of grid code.”