UK balancing costs up over 80% YoY as constraint fees boom

London — UK power network balancing costs for the first two months of 2020 climbed 82% on year as constraint payments to gas and wind plants more than doubled, National Grid data show.

Costs of GBP300 million ($370 million) for January/February this year included constraint payments of GBP194 million – comprised mainly of rebalancing payments to gas plants, constraint management payments to wind farms and rate of change of frequency (ROCOF) expenses.

Data for February alone showed monthly constraint payments nearing the GBP100 million mark for the first time as gales swept across the UK, forcing the system operator to constrain off wind farms, pushing regional payments for Scotland up to GBP50 million.

Scottish payments had already been historically high in January at GBP29 million, boosted by an ill-timed month-long outage on the Western HVDC Link to February 8.

The 2.25 GW subsea cable was built to transit Scotland's wind surplus south to load centers in England. It has a chequered history of outages in its three-year operational life.

In late January regulator Ofgem launched an investigation into National Grid and Scottish Power for the delivery and operation of the cable.

The link was built by Siemens and Prysmian and runs from Hunterston in Scotland to Flintshire Bridge in Wales. It is the first submarine link with a DC voltage level of 600 kV.

Constraint payments relate to instructions by the grid to reduce or increase generation, usually to balance locational bottlenecks on the network. Most wind power is generated in the north while demand is in the south. This causes grid bottlenecks north to south, forcing National Grid to turn down wind generation and turn on flexible plants closer to load centers.

In February, flexible gas plants were paid GBP51.72 million in system rebalancing fees, while wind farms were paid GBP41 million in constrained off fees.