Wind farm accused of using loophole to pull in £647m

Wind farm
Wind farm

An offshore wind farm in Scotland has netted £647 million through a net zero loophole and by receiving payments when not producing electricity, a think tank has claimed.

The Renewable Energy Foundation (REF) alleged that consumers had effectively overpaid hundreds of millions of pounds for the Moray East wind farm in north-east Scotland as a result.

Moray East comprises 100 9.5MW turbines in the Moray Firth and is majority-owned by Ocean Winds.

According to analysis by the REF, between June 2021 and July 2023 it received more than £1.1 billion.

However, the think tank believes that a substantial proportion of that income is likely to be derived from controversial features of the energy system.

‘Government needs to be honest with the public’

Moray East was originally awarded a contract for difference (Cfd) with a guaranteed but capped price of 57.50 per MWh in 2012 prices – about £74.49 in current prices.

However, the wind farm has exercised a power granted by the Government to postpone the start of the contract, meaning it has benefited from much higher market prices following the invasion of Ukraine.

The REF estimates that had Moray East implemented its CfD and delivered electricity at the contracted price it would have received £350 million, with the consumer receiving the difference of about £460 million.

At the same time, the wind farm has received payments for cutting its output at times when its electricity cannot be used locally or transmitted to other areas of the country because of grid congestion.

However, the Government has said that grid constraints are a natural part of an efficient electricity system and that “constraint payments” are used around the world.

Dr John Constable, the REF’s director, said: “The UK’s approach to renewables has resulted in unjustifiably high costs to consumers, but the multitude and complexity of the revenue streams available to generators has concealed this fact.

“Government needs to be honest with the public.”

A spokesman for Ocean Winds said: “Moray East remains on course to start its CfD within the contractual terms set by the process and has always acted in accordance with this agreement.”

A spokesman for the Department for Energy Security said: “It is not in the spirit of the scheme for generators to delay their start date to increase revenue.

“We have made changes to the scheme to ensure this is not possible for projects from round five and beyond.”