Wind farm ‘loophole’ could add £300 to household bills

‘The Government says it is fixing the problem, but it will be years before households see the results’

A NET-ZERO loophole being exploited by wind farm owners could add as much as £300 a year to consumer bills by 2028, campaigners have claimed.

The owners of two wind farms that made deals with the Government to generate electricity for a guaranteed rate have postponed the start of the contracts, to benefit from record prices.

Some claim this could mean consumers will pay up to hundreds of millions of pounds a year more than expected.

Net Zero Watch, which scrutinises climate policies, said the system incentivises all the firms expected to enter similar contracts to use the loophole over paying sums back to consumers.

If all the firms with contracts starting before 2028 postponed the start of the deals, consumers would pay up to £8billion a year more than expected, or £300 per household, the group said. About 70 per cent of this relates to wind farms that may postpone contracts and 25 per cent is linked to nuclear.

Kwasi Kwarteng, the Business Secretary, believes developers postponing the start dates of “contracts for difference” in order to profit from record energy prices are “undermining the renewables scheme and not behaving within its spirit”.

Craig Mackinlay, chairman of the Net Zero Scrutiny Group of MPs, said: “The Government says it is looking into fixing this problem, but it will be years before households see the results; in the meantime, bills are going to be hundreds of pounds higher.”

The estimated £8billion increase was calculated using an average market price of electricity of £200 per MWh, based on the cost in the first quarter of 2022, which reached £250 per MWh in March after the Russian invasion of Ukraine. The wholesale price has since dropped below £90, but the fall is expected to be temporary.

Some developers have already chosen to postpone. Earlier this month, The Times reported that the Moray East farm and the third phase of the Triton Knoll site, Lincs, have postponed start dates until next spring.

A spokesman for Moray East, whose owners include Engie and EDPR, told The Times it was on course to sign its contract “within the contractual terms set by the process”. A spokesman for Triton Knoll’s owners, RWE, J-Power and Kansai Electric Power, said they were using flexibility in the contract “to vary the start date, enabling a project to allow for delays and losses incurred during the construction process”.