Energy Customers Carry the Burden of Non-Supply

Energy customers find themselves paying for the non-supply of electricity.
Published: Tue 06 May 2014

Millions of British Pounds are being spent in ‘constraint’ payments from National Grid to wind-farm operators in the UK. This means that consumers will “continue to foot ever increasing bills for these payments”, unless the Government works with energy companies and industry to develop a clear energy-storage strategy.

This is according to a new report by the Institution of Mechanical Engineers.

Unnecessary ‘constraint’ payments on the increase

Currently, under existing market arrangements, if an energy-generating company is unable to feed its power into the National Grid because it is not needed, it will be entitled to receive ‘constraint’ payments.

The Renewable Energy Foundation has revealed that £8.7 million in constraint payments have been made to wind farms in March. This forms part of the £13,749,814 already paid out this year. In 2013, wind farms received ‘constraint’ payments totalling £32,707,351.

Energy storage will harness clean energy potential

The Renewable Energy Foundation says it’s time that the UK government adopts energy storage technology solutions in order to realize the full potential of renewable energy.

In its Energy Storage: The missing link in the UK’s Energy Commitments report, the Institution highlights energy-storage technologies such as those based on cryogenics, flywheels, pumped heat and graphene super-capacitors.

Constraint payment-unnecessary consumer cost

Tim Fox, the organisation’s head of energy and environment, explains that without investment in energy-storage technology, ‘constraint’ payments are likely to become an unnecessary extra cost for the consumer.

These payments are becoming a major concern for consumers since they are effectively funding the non-supply of electricity from a range of generating technologies.

According to Mr Fox, virtually any form of energy storage can alleviate this since excess electricity, generated from intermittent renewable sources, will be stored until called-upon.

Problems for security of supply

A report from the Royal Academy of Engineering suggests that there needs to be a radical overhaul of the way that the electricity system is managed. It says that the current grid can cope with up to a 20% contribution from wind power without the need for significant upgrades to the system, using existing balancing mechanisms.

However, beyond this threshold, the management of the system will become even more difficult.

The report points out that the variable nature of wind power will present problems when there is a mis-match between output and consumer demand. If wind power continues to grow beyond 2020, days with negligible wind power could “present problems for security of supply”.

Professor Roger Kemp of Lancaster University, a member of the working group, says: “Wind energy will be only one of the tools available — alongside other generating technologies, better connectivity and demand side measures. All will need to be carefully integrated, using a systems engineering approach.”

As the world moves towards a low-carbon future, the energy industry and infrastructure will have to evolve with — or ahead of — electricity demand to accommodate more clean energy.