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Renewables are changing the UK’s energy map: time to rethink its pricing system?
The UK energy sector is divided over proposals to change the country’s electricity pricing system, whereby under an auction system all customers in England, Scotland and Wales pay the same amount per kilowatt (with variations determined by the tariffs and agreements they have reached with their distributors), to .
Why the calls for change? Proponents say the single price system creates enormous inefficiencies derived from the interconnection system and saturation in some areas, which usually ends with wind farms being stopped and receiving money in exchange for not generating power so as to avoid overloads in local distribution networks. This is due to the disparity, in many cases, between the infrastructure and demand.
In the Shetland Islands, for example, which are the windiest area of the country, wind turbines are often stopped to prevent local grids that supply a very small population and industry from being overloaded, which costs the government billions of pounds per year.
In other areas, renewable infrastructure is not installed due to administrative complications, or a lack of licenses or subsidies. The result is a highly inefficient generation map based not on each area of the country’s real…
