Consumers face energy bill rises as lockdown means power slowdown

The costs of the interventions would be funded by consumers through their energy bills.

It comes as the National Grid forecast a new record low power demand on Sunday.

New analysis highlights the risk of blackouts as the National Grid deals with having too much electricity in the system, due to the demand slump.

A report commissioned by Drax Electric Insights stresses a flexible power system to rapidly respond to changes on the grid has become "increasingly critical" in preventing powers cuts as Britain transitions to a net zero economy.

Companies have already cut their demand for electricity to keep the grid stable when supply from wind power rapidly slumped, assisted by faults in January and February with the Western Link, which connects Scottish wind farms via Hunterston to England and Wales.

Iain Staffell of Imperial College London and lead author of the quarterly Electric Insights reports said: “Britain’s electricity system is under pressure like never before, with both the country’s weather getting more extreme and a global pandemic testing its resolve.

READ MORE: Energy price cap branded "con" as Scots energy bills set to rise by up to £184 a year

“So far in 2020 we’ve seen companies reducing their demand for electricity to help keep the grid stable when supply from wind power rapidly decreased, and then the Covid-19 lockdown caused many businesses to shut up shop, reducing electricity demand and creating new challenges with oversupply of power.

“Having flexibility within the power system at these critical moments is crucial to keeping Britain’s lights on.”

With businesses closed, and people at home, electricity demand has slumped to levels not seen since the 1980s when power prices were at a 12-year low, according to the anlayis.

In March, the Herald revealed households faced a huge hike in their energy bills after a record surge in subsidy payments to switch off Scottish wind farm turbines partly caused by them producing too much power.

In the first two months of this year, £69 million was paid out in constraint payments, according to analysts' research.

This was four times greater than the previous most expensive January-February period on record, which was in 2016.

The money is given out as compensation to energy firms for turning off turbines when the network is unable to cope with the power they produce.

The payments which kicked in in 2010, come when wind power in Scotland exceeds local demand but cannot be exported to England due to insufficient grid infrastructure.

The surge in payments was partly because of strong winds, which means farms were generating too much power.

The Electric Insights report said: "The impact of lockdown on Britain’s electricity demand is much like living through a month of Sundays," said the analysis.

"People no longer have to get up at the crack of dawn for work. On a typical weekday morning, demand would rise by 10 GW over two hours from 5:30 to 7:30 AM. Now it takes more than twice as long – until midday – for this rise to occur.

"At the other end of the day, there would normally be a small peak in demand around 8pm from people gathering in pubs and restaurants up and down the country. Both on weekdays and weekends, demand begins falling earlier in the evening as the sofa has become the only available social venue."

It further revealed that output from wind farms soared in the first three months of this year, up by 40% compared to the same period last year as severe storms meant Britain experienced its wettest and windiest February since records began – but it was flexible power stations and action from businesses, able to reduce their electricity usage in January, which helped prevent blackouts during cold, calm spells.

Earlier this year, the energy watchdog Ofgem launched an investigation into National Grid and ScottishPower, the Glasgow-based arm of Spain’s Iberdrola, over the subsea power cable's delivery and operation.

The joint project, which was billed at the time as the world’s largest subsea interconnecting power cable, was originally due to be completed in late 2015 but electricity did not start flowing through until December 2017.

It started at less than full capacity in 2017 after problems during construction. The line has suffered six faults since then, taking it out of action for months at a time.
Ofgem said in January that it would “review the performance” of National Grid and ScottishPower and whether they breached their operating licences through the late completion of the scheme. The regulator said it would also “examine potential breaches relating to the operation of the cable”.

It has the power to fine them up to 10 per cent of their turnover.

The Western Link runs from Ayrshire to north Wales via a 239-mile subsea route to the Wirral peninsula and a 20-mile stretch underground. It is designed to carry 2.2 gigawatts of electricity, enough to power four million homes.
The report says that the investigation into the performance of the cable, should help to "alleviate" constraints that force Scottish wind farms to turn off when their output cannot be transported down to the rest of the country.

Prysmian handed the project to National Grid and Scottish Power late last year and has booked €165 million in provisions for repair costs and "contractual penalties".
Ofgem said that National Grid and Scottish Power had been officially required to deliver the link by March 2017 but that it was made fully available only in December, before the latest fault.

It is not just wind that is flying the renewables flag.  A new record for sun power was set in April — with solar farms powering nearly 30 per cent of the grid at their peak, due to bright weather and low pollution.

Yesterday the International Energy Agency called on governments to put clean energy at the heart of their coronavirus economic recovery plans, as it forecast the first slowdown in new renewable power installations worldwide in two decades.
The IEA warned that lockdown measures - which at their peak affected more than half the world's population would have "far-reaching" consequences, as the world grapples with a crisis that has sent energy demand plummeting and threatens a deep economic recession.

The agency, which had expected 2020 to be a bumper year for green energy, prediccts that the world will grow its capacity of renewable energy by 6% or 167 GW this year. The forecast growth is 13% less than the amount of new capacity which started up in 2019.

It cited supply chain disruptions, construction delays, social distancing measures and financing challenges.

“Countries are continuing to build new wind turbines and solar plants, but at a much slower pace,” said Fatih Birol, the IEA’s executive director. “Governments must not lose sight of the essential task of stepping up clean energy transitions to enable us to emerge from the crisis on a secure and sustainable path.”

The UK government has promised to move ahead with an auction for renewable energy subsidy contracts next spring which will include bids from onshore wind and solar projects for the first time since the government lifted a block on financial support put in place four years ago.