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Zonal pricing & curtailment article

Posted: Mon Jun 09, 2025 10:59 am
by Joeboy

Re: Zonal pricing & curtailment article

Posted: Mon Jun 09, 2025 11:51 am
by Sim_C
So many of these articles only highlight payments made for curtailment (switching off) of wind turbines, but there is never any mention of quantified payback amounts under the contracts for difference system of cap and floor pricing for excess prices paid when the gas generation prices are high.

I do not have a handle on what proportion of the UK wind generation is now under CfD or the payback system and when it kicks in.

The so called 'green levies' presumably cover the costs for periods when the generation prices are below the agreed strike price, but are they also reduced by monies returned by the generators when prices are above the cap?

I am sure it is a hugely complex system, but there must be some balanced reporting around, or is that wishful thinking?

Re: Zonal pricing & curtailment article

Posted: Mon Jun 09, 2025 1:21 pm
by nowty
Unfortunately it is complicated,

CFDs are run via the government owned Low Carbon Contracts company, website is here,
https://www.lowcarboncontracts.uk/

Specifically about CFD is here,
https://www.lowcarboncontracts.uk/our-s ... ifference/

Latest annual report is here,
https://lcc-web-production-eu-west-2-fi ... t_2324.pdf


For curtailment / constraint costs, the NESO pays these through the balancing mechanism. It actually makes a profit but the revenue is charged to transmission charges which partly is charged to the generators and partly to consumers via their bills.
https://www.neso.energy/

The latest accounts when they were the ESO but that was before it was nationalised and bought out of National Grid.
https://www.neso.energy/document/321846/download