UK energy regulator Ofgem probes claim wind farm operators 'overestimated' output
UK energy regulator Ofgem probes claim wind farm operators 'overestimated' output | Windpower Monthly
The probe was launched following a report by Bloomberg, which claimed owner-operators of dozens of wind farms in the UK were routinely overestimating daily output forecasts from their wind farms.
Companies that did so were consequently paid more money by the national grid operator under a curtailment scheme. The daily output forecasts help the grid operator to assess how much wind-generated electricity there will be, and to tell operators to shut off wind farms at times of extra high output to avoid overloading the grid. Wind farm operators are paid for doing this.
Bloomberg cited nine sources including academics, market experts and anonymous traders at energy firms to back up its overestimation claims, which it explained were based on analysis of 30 million records from 121 wind farms between 2018 and end of June 2023.
The report claimed that output at 40 wind farms was overstated by at least 10% on average, while 27 wind farms overestimated output by at least 27%.
Investigation
An Ofgem spokesperson told Windpower Monthly the regulator is now investigating the claims made in the report.
“Ofgem is investigating the alleged behaviour and has already asked the energy system operator – National Grid ESO – to look into this – they are responsible for the day to day running of the electricity grid and monitor the behaviour of energy market participants,” the spokesperson said.
“Ofgem will work closely with the ESO to consider all the facts and if it finds evidence of egregious action or market abuse, enforcement action will follow. Ofgem will continue to work to protect market integrity and the best interests of consumers, as demonstrated by the recent cases we have concluded against generators who charged excessive prices behind transmission constraints.”
French utility EDF, clean energy developer Fred Olsen Renewables and JP Morgan-backed Ventient Energy were among the companies named in the Bloomberg report.
For example, Bloomberg claimed that EDF’s Fallago Rig overestimated the amount of power it would produce by 27.1% over the five-and-a-half-year period covered by the study.
The report did not establish conclusively whether the detailed overestimations were deliberate or unintentional.
An EDF spokesperson said: “At EDF Renewables UK we take compliance very seriously and we are looking into this further.”
Windpower Monthly has also contacted Fred Olsen Renewables and Ventient for comment.
The report's findings were not the first time overestimation of output has been reported in the wind industry. Danish utility Ørsted admitted overestimating output across its portfolio in 2019, with its former chief technical officer Marianne Wiinholt describing overestimation as an "industry-wide issue".
Related Knowledge Center: Offshore wind energy
Over the next decade, U.S. offshore wind power is expected to grow from a single 30-megawatt wind farm off Rhode Island to more than 2,000 MW of capacity along the Atlantic Seaboard. There are contracts for wind power off the coasts of Massachusetts, Connecticut, New York, Maryland, New Jersey, Rhode Island, and Virginia.
The National Renewable Energy Laboratory has estimated the United States has over 4,000 gigawatts (GW) of offshore wind potential, enough to power the country four times over.
The growth in part being spurred by state solicitations, including in New York, where then-Gov. Andrew Cuomo (D) set a commitment of 9,000 MW of offshore wind by 2035, and in Connecticut, where in June 2021, Gov. Ned Lamont (D) signed legislation authorizing the construction of 2,000 MW of offshore wind by 2030.
The offshore development is also being driven by an investment tax credit set to end in December 2019 and is equal to 12 percent of expenditures. U.S. Sens. Susan Collins (R-Maine) and Tom Carper (D-Del.) have introduced a bill to extend the tax credit for up to eight years.
The Interior Department has held eight competitive lease sales that resulted in 15 offshore wind leases over 1.7 million acres that has the potential for 21 GW of capacity. In February 2022, the Bureau of Ocean Energy Management completed a bidding process that realized $4.37 billion for 488,000 acres across six lease areas in federal waters off New York and New Jersey.
Projects have also been proposed off the Southeast coast, off California and Hawaii, and for the Great Lakes.