THE energy watchdog has opened an investigation into a Scottish wind farm amid allegations that it added more than £130 million onto people’s energy bills.
The Moray East wind farm, which is located in the Moray Firth off Wick but run by a London-registered company, is being probed by Ofgem amid concerns it may have charged consumers “excessive” prices not to generate power.
Wind farms are routinely given “constraint payments” to reduce or stop generating energy when the grid cannot handle the power they produce. These payments are added directly onto people’s bills.
Last October, The National reported on data from the Renewable Energy Foundation (REF) which showed more than £100m in such payments had been handed to Scottish wind farms in the 100 days since Labour took power at Westminster.
In January, the trade outlet Energy Voice reported on new REF data showing that across 2024, constraint payments for Scottish wind farms totalled more than £390m.
In February, the REF published analysis suggesting that consumers had been “overcharged by more than £300m” by wind farms who were allegedly “charging to reduce generation during periods of grid constraint”.
REF added: “We could see no justification for wind farms that are not losing income when constrained to charge for any reduction in output. Their commercial position is not harmed, and therefore the constraint payment represents additional and unearned income.”
The think tank published a table showing that the Moray East wind farm had, between September 21, 2021 and February 29, 2024, charged consumers £136.8m to stop producing power.
Now, energy regulator Ofgem has opened an investigation into the site – but cautioned that it does not “imply that we have made any findings about non-compliance”.
Ofgem said: “In order to manage transmission constraints, National Energy System Operator (‘NESO’) routinely uses the balancing mechanism (‘BM’) to increase and decrease the amount of electricity produced by different generators.
“Typically, when managing a transmission constraint, NESO will only have a limited number of alternatives available to it. This creates a risk that generators could exploit their position by charging NESO excessive prices to reduce their output. The TCLC prohibits them from doing so.
“Since it began operating in the BM in September 2021, Moray East Offshore Windfarm has been regularly instructed by NESO to reduce its generation to manage transmission constraints.
“Its bid prices since then appear expensive relative to the expected marginal cost of reducing generation for this generator. Our investigation will assess whether these bid prices were excessive during periods of constraint.”
In a statement published after the probe was announced, the REF said Ofgem had “at last” acted on their concerns.
It went on: “While Ofgem is to be commended for starting an investigation into Moray East offshore wind farm, it is disturbing that it has apparently taken nearly two years for an investigation into this single wind farm to commence.
“Our data suggests that almost all of the 123 wind farms which have received constraint payments have been overcharging the consumer and that Ofgem needs to develop a more serious strategy for reclaiming these payments and returning them to the consumer very much more promptly.”
In 2023, energy giant SSE was ordered to pay a £9.8m penalty after Ofgem found it had overcharged during times of transmission constraint.
The news comes as the UK Government hailed the switching-on of the nearby Moray West wind farm.
Moray Offshore Wind Farm (East) Ltd has been contacted for comment.
