Unresolved grid bottlenecks risk adding £200 to annual household bills by 2030

LONDON 15 June– Britain wasted enough wind generation last year to power a million homes, because investments in, and planning approvals for electricity grid upgrades are not keeping up with the rapid growth of wind power development – finds a report published today by the financial think tank Carbon Tracker. 

It warns electricity grid upgrades are not matching the growth of the wind power pipeline, and the costs of inaction could treble by 2026, and cost the country £3.5 billion a year by 2030, increasing average annual household electricity bills by nearly £200 and generating 6.8 million tonnes of emissions. 

Lorenzo Sani, Carbon Tracker Power Analyst and report author said:  

“The electricity grid is not fit for purpose because investments are not increasing in step with the rapid growth of wind power. Without significant improvement in the permitting timeframes for critical energy transmission infrastructure – the grid can’t support the government’s plans to decarbonise generation by 2035 or deliver on its vision of ‘affordable, homegrown, clean energy.” 

“If no action is taken, wind congestion costs could treble in the next three years. However, by prioritising investments in grids and flexibility, potential congestion costs of £3.5bn could be halved by 2030.” 

 Gone With The Wind? – Grid congestion and wind integration in GB calls on policymakers and regulators to prioritise transmission project delivery as a matter of urgency, focusing on the need to fast-track permits and for better anticipation of growing demand bottlenecks requiring investment in strategic infrastructure, before they reach a critical phase. 

 RenewableUK’s Director of Future Electricity Systems Barnaby Wharton said: “This report shows how essential it is to upgrade our electricity grid to reach the Government’s net zero target. We’ve known for years that more renewables need to be built to meet our goals, but the network has not kept pace, creating bottlenecks and constraints in the system, and this is costing consumers hundreds of millions of pounds. The solution to this problem is clear: building more grid is essential to getting low cost, low carbon power to consumers and reducing our reliance on gas imports.” 

 The report reveals that on more than 200 occasions in 2022, bottlenecks in the transmission system meant National Grid ESO had to pay Scottish wind farms to stop generating zero-carbon power and pay gas power stations in England to increase output to compensate. This added £800 million to consumer electricity bills and increased greenhouse gas emissions by 1.3 million tonnes.  

 Scotland has 10GW of wind farms but accounts for only 10% of GB electricity demand, so much of the power they generate is consumed in England. However, the grid can currently only transmit a maximum 6GW across the border, so on windy days this generation must be curtailed due to what the report calls “wind congestion” and gas stations fired up. The wind congestion problem will persist until such time as the transmission bottlenecks are solved. 

 As wind deployment outpaces grid expansion, curtailment costs on the Scotland-England boundary are set to soar dramatically 

 Carbon Tracker Initiative (2023) 

Gone with the Wind? reveals wind generation in Scotland is expected to grow four times faster than the build-out of new transmission capacity required to transmit power across the border. While there are plans to build four new undersea cables between England and Scotland with a combined capacity of 8GW, due to capacity constraints and bottlenecks in the planning process, only two will likely be operational by 2030.  By then Scotland could have an additional 28GW1 of wind power, based on the current pipeline of onshore and offshore projects. The report notes new cables could generate in one single year savings equivalent to half their investment cost. 

Lucy Yu, CEO of the Centre for Net Zero, said: “The UK is wasting a lot of wind power – and this is only set to continue. The grid’s capacity is holding back our ability to effectively harness the growing amount of green energy that’s available. Building more cables is important, but we can also use our existing infrastructure more intelligently. Our research shows that transitioning to a flexible energy system, whereby we incentivise demand to match supply using the right price and carbon signals, presents a huge opportunity that we must pursue to realise our net zero ambitions”. 

The report calculates that by 2030 grid congestion across the B6 Scotland-England boundary could be wasting 20% of Scottish wind output – enough electricity each year to power more than five million households. If gas power plants continue to make up the shortfall combined payments to wind farms and gas plants could reach £3.5 billion a year.  

Scottish wind farms make up 40% of current GB wind capacity but they account for 95% of wind curtailment events because of the transmission bottleneck across the border. And in more than 85% of these events gas plants elsewhere on the grid are requested to increase generation by the same amount as wind is curtailed, pushing up emissions.  

Overall, from January 2021 to April 2023, £1.5 billion has been spent to curtail more than 6.5 TWh of wind power resulting in 2.5 million tonnes of emissions. In 2022, 4% of GB wind generation was wasted due to wind congestion – 3.4TWh – equivalent to the yearly consumption of 1 million British households. With gas price volatility at a record high following Russia’s invasion of Ukraine, gas-fired plants were paid nearly £600 million to compensate for curtailed wind power, increasing UK emissions by 1.3 million.  

During 2022 when consumers experienced record-high electricity costs, the grid wasted record amounts of much-needed cheap and clean electricity, because it could not effectively transfer wind generation from Scotland to England, and this is only getting worse. 

 Wind Curtailment January 2021 – April 2023 

Carbon Tracker Initiative (2023) 

The report says the cheapest, most effective and durable way to reduce congestion is to build more cables. The cost of installing two undersea cables between England and Scotland in addition to the four that are planned would be around £3.7 billion, and if these were in place by 2030 it would halve yearly wind curtailment, saving more than £1.7 billion a year. Regardless of recent regulatory updates, it is unlikely that additional new cables could be developed in time. 

Completion of the Eastern HVDC undersea cable from Peterhead in Scotland to Hawthorn Pit in England was delayed four years, from 2023 to 2027, because of the time Ofgem took to approve it. As a result of this delay, we estimate that by 2026, congestion costs on the Scotland-England boundary would treble to almost £3 billion. 

Furthermore, the report calculates that if the four planned undersea cables were operational a year ahead of schedule, they would save £3.9 billion in congestion costs, while a year’s delay could cost an extra £3.6 billion. 

Government should identify and anticipate investments in the strategic infrastructure needed to deliver on its 2035 decarbonisation targets, the report says, warning that both North Wales and East Anglia will need increased transmission capacity to cope with plans to significantly increase low-carbon generation. 

Low-carbon technologies can help reduce wind congestion while increasing the resilience of the power system. Batteries and pumped hydropower can store energy when the transmission system is saturated. Electrolysers can use excess power to produce green hydrogen, which could help accelerate the decarbonisation of heavy industry and shipping or be stored and burned in turbines to generate power when there is little wind.  

 Accelerating investments in storage and flexibility could see Scotland deploy by 2030 an additional 7GW of battery storage, 3GW of pumped hydro storage, and 4GW of hydrogen electrolysers. This mix could reduce wind curtailment by 55%, cutting costs from £3.6 to 1.6 billion, and produce enough green hydrogen to meet almost half the UK’s expected demand, the report finds. However, these technologies will cost almost £20 billion to deploy. 

 The report says that grid congestion represents a business opportunity for providers of low-carbon flexibility, noting that a similar mix of technologies would be required south of the border to take advantage of Scottish export surpluses during periods of low demand.  

 However, it says the electricity market needs stronger price signals to attract investment to the regions that need it most and calls for a review of the Capacity Market and Contracts for Difference rules.  

 Gone with the Wind? also calls on the government to develop policies that will accelerate the commercial use of long-duration energy storage such as flow batteries, liquid air and hydrogen. 

Methodology – Carbon Tracker identified payments to wind farms to curtail generation and to gas power plants to increase generation by analysing trades on the National Grid’s Balancing Mechanism, the primary tool it uses to balance the system and solve grid congestion. The author built a model to calculate future congestion on the Scotland-England grid boundary and found results aligned with the latest projections from the Energy System Operator. 

Once the embargo lifts the report can be downloaded here:  https://carbontracker.org/reports/gone-with-the-wind/  



To arrange interviews please contact: 

Joel Benjamin Jbenjamin@carbontracker.org +44 7429 637423 

Conor Quinn conor.quinn@greenhouse.agency +44 7444 696214 

Maria Dolben maria.dolben@greenhous.agency +44 7408 809839 


About Carbon Tracker 

The Carbon Tracker Initiative is a not-for-profit financial think tank that seeks to promote a climate-secure global energy market by aligning capital markets with climate reality. Our research to date on the carbon bubble, unburnable carbon and stranded assets has begun a new debate on how to align the financial system with the energy transition to a low carbon future. www.carbontracker.org