Wind farm at centre of blackout handed £100,000 payout
THE wind farm involved in last week’s blackout was awarded nearly £100,000 compensation after being told to reduce its output the day after the power cut, The Daily Telegraph can reveal.
About a million homes and businesses in various parts of the country were left without electricity last Friday when Hornsea Wind Farm and Little Barford gas-fired station went off grid within minutes of each other. After getting back online, National Grid ordered Hornsea to reduce the electricity it supplied overnight on Saturday.
This entitled its owners, Orsted, to compensation. Although National Grid, a private FTSE 100 company, insisted the decision to cut Hornsea’s supply was not related to any role it played in the blackout, the restrictions were the first to be imposed on the plant since it went live in February.
National Grid, which owns the country’s electricity infrastructure, makes millions of pounds of so-called “constraints compensation” payments every year. The system pays if a supplier with a contract to produce a certain amount of power is then told less is required. While this affects home and business owners’ bills, National Grid insists it is the most effective way of cutting costs because it avoids the need to build more energy infrastructure.
The payout emerged on the day National Grid will reveal what triggered the blackout. Its report is expected to inform Ofgem, the energy regulator, and ministers how the failure in the North Sea and in Bedfordshire blacked out swathes of the UK.
An energy expert told The Telegraph yesterday of the “striking coincidence” that Hornsea was told to reduce supply just after it apparently contributed to the once-in-a-decade blackout, particularly having never been asked to before.
Dr John Constable, director of the Renewable Energy Foundation, which
analyses the green energy market, said: “This compensation raises important questions about the way wind farms receive payment for reducing output, particularly so soon after being involved in a blackout which is still under investigation.
“Our analysis shows there was a drop in system frequency to below normal operating limits on Saturday night, just before Hornsea was told to reduce output. It raises the further question of whether this was another near-miss.”
A National Grid spokesman said it continuously “balances the system second by second”, adding how limiting Hornsea’s supply was “business as usual” and not related to any involvement in the blackout.
“There are physical constraints on the network and to manage these we can ask generators to reduce their output in order to maintain stability and manage the flows on the network.
“Generators are compensated via a constraint payment, the most economical way to run the system, keeping costs as low as possible for consumers.
“Hornsea One received constraint payments on Saturday and Sunday as part of our ‘business as usual’ operation of the system. These payments were not related to Friday’s power cut.”
An Orsted spokesman confirmed that Hornsea was asked over the weekend to reduce its production of energy, adding it was a condition of its Ofgem licence intended to guarantee efficiency, security and value for money.
“To put this into context, on Saturday the National Grid made over 1,600 such requests to generators of all kinds,” she said.
National Grid was said to have experienced three “near-misses” in as many months before Friday’s blackout.
A spokesman denied here had been three near-misses and said that the system had remained “in safe limits” since.
The blackout affected London, the South East, Midlands, South West, Yorkshire, the North East, Cornwall and Wales.