Wind farms sometimes have to be paid to turn off when there is no grid capacity for the electricity they produce
DANNY LAWSON/PA
It has been well over a year since Labour pledged to slash energy bills by £300 by the end of the decade. This election promise, reiterated by Sir Keir Starmer in February, is already in trouble as bills continue to head in the opposite direction.
Ofgem, the energy regulator, announced on Wednesday that electricity and gas prices will go up by about 2 per cent for millions of households. From October, the energy price cap will rise to £1,755 for the typical home, the equivalent of a £35 rise for the average customer. This may be lower than the current rate of inflation but for householders already fearful about the punishing cost of the coming winter, any rise is unwelcome.
Unlike previous adjustments to the price cap, wholesale energy prices are not chiefly to blame for this rise. Since Russia’s invasion of Ukraine the cost of gas has soared by 75 per cent. The energy price cap was introduced to help protect consumers from spikes in the international spot price but it is a new problem with Britain’s energy supply that is causing the current problem: an excess of wind power, or rather the inability of a national grid designed for the fossil fuel age to distribute it. Ofgem says about £15 of the bill increase is being used to pay wind farm operators to turn off their turbines so as not to overload the grid.
This scarcely believable situation, in which the public is being denied cheap energy because it cannot be transported to homes, is all too familiar in modern Britain. As a world leader in offshore wind generation, the United Kingdom should be well placed to benefit from the cheap power its swelling numbers of turbines produce. But the grid is lagging in this pivot to power produced on the continental shelf. It was designed to distribute the output of giant coal, and then gas, power stations sited in the heart of the country. The pylons and cables are simply in the wrong places.
The result: millions are being wasted paying wind providers who are not actually supplying electricity. Wind farms in Scotland and the North Sea are among those lacking the necessary connections. National Grid is undertaking a £35 billion expansion of transmission lines but previous underinvestment has resulted in a long backlog. The 111-mile Norwich to Tilbury pylon expansion is delayed to 2031, and so too is an undersea connector bringing Scottish energy to England.
Ed Miliband, the energy secretary, has sworn to deliver a net zero energy revolution come what may, and has promised to “take on the blockers, the delayers, the obstructionists” thwarting expansion of the grid. But building the necessary network will take years and cannot come soon enough to protect consumers from many more price fluctuations. One measure that could help is the use of high-capacity batteries to store renewable energy and smooth out supply and demand. The government wants to accelerate this.
Also, in his dash for wind (and solar) Mr Miliband has failed to pay sufficient attention to nuclear and the enhanced resilience it can provide. New nuclear power stations at Hinkley Point in Somerset and Sizewell in Suffolk will merely replace part of the country’s rapidly ageing and shrinking reactor fleet. The energy secretary must push harder on big nuclear, and on small modular reactors, in which Britain is, like wind, a leader.
There is no doubt that the move from a fossil fuel to a renewable grid is a huge national endeavour that can no longer be impeded by nimbyism or planning law. It must be driven through to completion. Mr Miliband famously claimed that the only way to bring down bills was to get Britain off the “rollercoaster” that is the fossil fuel market and on to clean, homegrown power.
True. But that requires a modern grid able to cope with more dispersed sources of supply. Otherwise that promise of a £300 price drop by 2030 will become an albatross around Labour’s neck.