Healey to veto new offshore wind projects if they will not lower bills

Healey is proposing a stricter test for new offshore wind projects seeking government subsidy contracts. Ministers would approve a project only if they believe Britain’s electricity grid can accommodate all the power it produces without increasing costs for consumers. The aim is to prevent new generation from being built faster than the network can use it.

The key problem is limited cabling capacity. When turbines produce electricity that cannot reach consumers, the National Energy System Operator can pay them to switch off. Those payments are funded through energy bills. Healey says there is no sense building power that cannot connect, then paying to stop it operating.

The policy will apply to Britain’s next renewables auction. Healey presents it as a route to cheaper electricity and stronger energy security, not a retreat from clean power. However, it adds to concerns that the 2030 clean-power target is becoming harder to achieve.

An offshore wind project is a group of wind turbines installed in the sea, where they capture wind and generate electricity. Undersea cables carry that electricity to shore, where it can enter Britain’s grid. Offshore projects are part of the renewable generation added to reduce reliance on gas and cut emissions.

A subsidy contract gives a developer support linked to the electricity it produces. This can help make a large, costly project financially viable and encourage companies to bid to build it. In Britain, new projects lodge bids in renewables auctions, and ministers decide which bids receive contracts. The article does not specify the contract’s exact payment formula.

The new proposal adds a grid and bill test. A project would be signed off only if ministers believe all its power can be accommodated without pushing up consumer costs. That matters because turbines can otherwise be paid to switch off when cables are full.

Britain’s annual costs for dealing with excess wind power could reach £7.8bn by 2030. The figure comes from a National Audit Office report published in September. It describes a possible burden on homes and businesses, rather than a confirmed bill that will definitely occur.

The cost arises when wind turbines generate electricity but the grid lacks enough cabling capacity to transmit it to consumers. The National Energy System Operator, or Neso, can then pay turbines to switch off. Neso is funded through energy bills, so those payments can ultimately increase costs for households and businesses.

The warning is central to Healey’s proposed policy. He wants the next renewables auction to select projects that can connect and lower bills. At the same time, the government still presents renewable generation as important for energy security and for reducing exposure to international gas-price shocks.

Building wind farms before enough grid capacity exists can raise bills because the electricity cannot always travel from turbines to consumers. A wind farm may be producing power, but overloaded or incomplete cables can prevent the grid from carrying it where it is needed. The power is then wasted rather than sold to households and businesses.

The key mechanism is a payment to switch off. The National Energy System Operator is forced to pay wind turbines to stop generating when there is insufficient cabling capacity. Neso is funded through energy bills, so the cost of these payments can pass to consumers. The National Audit Office warned that the annual cost could reach £7.8bn by 2030.

Healey’s proposed auction rule is intended to reduce this problem. Ministers would approve only projects they believe the grid can accommodate. This could control avoidable costs, but the article says the approach has increased concern about progress toward clean power by 2030.

The policy sits between two goals. Britain wants clean power by 2030 and more renewable generation to reduce exposure to volatile international gas prices. Healey argues that clean power is how the country can break gas’s grip on bills. He also says recent renewable generation softened the impact of this year’s gas-price shock.

However, Healey wants new offshore wind projects approved only when the grid can carry their electricity without raising consumer costs. That means the government may reject or delay projects if cables and other network capacity are not ready. The aim is to avoid paying turbines to switch off, while making electricity cheaper for households and businesses.

The move appears to be another shift away from Labour’s 2030 clean-power target. Earlier budget cuts of more than £3bn to the energy department had already alarmed renewables experts. Healey insists the approach is a credible route to clean power, not a retreat from it.

The government reduced the money available for its boiler upgrade scheme, which helps households replace gas boilers with electric heat pumps. The budget included £741m in cuts from the scheme. The reduction matters because heat pumps are part of the government’s plan to expand clean heating in existing homes.

A typical household can claim £7,500 toward a heat pump. About 60,000 are fitted each year in existing homes, but the government wants that number to reach 250,000 annually by 2030. Before the cuts, funding was planned to rise from £400m this year to just over £700m by 2029-30.

The cuts prompted warnings that clean-heating ambitions were being weakened. They also fuelled claims of a broader move away from the green agenda associated with Ed Miliband and Miatta Fahnbulleh. Their allies rejected that view, pointing to plans to shift green costs from bills to taxpayers.

An electricity grid balances supply and demand by matching the power generated with the power homes and businesses use. If generation exceeds demand, electricity must be stored, exported, or curtailed. If demand exceeds generation, other sources or stored power must respond. This balance keeps the system working reliably.

Wind makes that task harder because its output varies with weather. Strong winds can produce more electricity than local cables can carry, while calmer periods can reduce generation. Transmission capacity moves power from windy areas to consumers. Storage can hold surplus electricity for later, and backup generation can help when wind output is low. These are established features of power-system planning; the article does not list specific storage or backup technologies.

The article highlights the cost of getting this timing wrong. Neso may pay turbines to switch off when cables are full. Healey therefore wants future projects approved only when the grid can accommodate their full output, although that could slow renewable expansion.