Author: PPD Team Date: 08/01/2025

British consumers are expected to pay over £1.8 billion in 2025 to help manage the power grid, as maintenance and grid limitations restrict the movement of renewable electricity from Scotland to cities in England. 

These costs, aimed at balancing supply and demand, challenge the UK government as it works to increase wind energy capacity while lowering electricity bills.

Despite an increase in wind power, the grid’s limitations and the structure of the UK electricity market have led to higher costs. 

At times, when the grid cannot handle the full generation of wind power, wind farms are paid to turn off, and fossil fuel plants are paid to turn on. These “constraint payments” are projected to rise to over £1.8 billion in 2025, up from £1.5 billion in 2024, according to Bloomberg.

The National Energy System Operator (NESO) emphasized its commitment to maintaining a safe and reliable grid at the lowest cost to consumers. However, additional stress on the system is expected due to maintenance and upgrades to the Scottish power grid, which will create outages at key chokepoints in 2025.

Scotland, with its high wind potential and low population, is a prime location for wind farms. However, the existing grid cannot transport surplus green power to areas with higher demand, leading to wasted electricity. Plans to expand power links between Scotland and England aim to address this issue, but curtailment could increase as wind generation grows faster than grid capacity.

The government is also considering a shift to a zonal electricity market, which would set regional power prices to better reflect the physical limitations of the grid. A decision on this is expected later this year.

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