Coffee House

The great British wind scam: the government responds

24 November 2012

3:34 PM

24 November 2012

3:34 PM

Even the most ardent supporters of renewable energy would agree that wind turbines should be erected only when the output is worthwhile. If a huge rotating beast is to blot a corner of the British countryside, then it must produce as much energy as is feasibly possible.

However, this does not appear always to be the case. In my article for this week’s Spectator, we uncover an abuse of government subsidies, in which green developers erect large turbines and then throttle the output (known as ‘de-rating’) in order to maximise profits:

‘Under the government’s Feed-In Tariff (FIT) scheme, which aims to make renewable energies competitive with fossil fuels, the size of a turbine is measured not by height but by power output. If a turbine pumps out more than 500kW, its owners receive 9.5p per kilowatt hour. But a ‘smaller’ sub-500kW one receives a subsidy of 17.5p per kilowatt hour, supposedly to compensate for its lower efficiency. The idea is to lure smaller wind-power producers into the market.’

‘Problem is, while smaller turbines are more popular with the public, those designs don’t produce anything like the 500kW needed to take full advantage of the subsidy. So instead, investors are buying big, powerful turbines and downgrading them, tweaking their components to churn out no more than the magic 500kW. It’s simply far more lucrative to hobble bigger turbines — machines that ought to be capable of producing almost twice as much electricity.’

Given our current rock-bottom interest rates, the Feed-in Tariff is a veritable license to print money. A source in the industry informed me that a 900kW turbine running at full output would return an substantial 7 to 9 percent return on investment per year; but, turned down to 500kW this return shoots up to an astonishing 17 to 20 per cent.


Manufactures have cottoned onto this opportunity and now produce models that are marketed to maximise revenue from the government. Compare Dutch firm EWT’s 52/54 500kW model and their 52/5400kW model. Both have the same blade diameter and same pillar height. The only difference is the power output and rated wind speed. I spoke to an EWT salesman, who informed me that inferior internal components are behind the limited power output. The physical difference between these two models — the height of seven double decker buses — is non existent.

The Department of Energy and Climate Change is currently undertaking a review of the FIT subsidy, in order to reduce the tariffs across the board thanks to government-wide cuts. Several of the review’s participants raised the issue of ‘de-rating’ and this is what DECC had to say: 

‘In regard to the so-called de-rating of turbines. We have examined the proposal and we do not consider that the technical proposals put forward to address the issue would necessarily bring net benefits. and could potentially limit access to the FITs scheme. However, we propose to keep open discussions with the industry about the issue in future.’

I asked DECC to clarify this statement, in particular what these future ‘open discussions’ would entail, as well as why they decided against reforming the methods used to measure turbines for subsidies. They are yet to respond. At a time when renewable energy subsidies are in the sights of No.11, DECC is doing little to reassure taxpayers who are having their landscapes ruined, and all in the name of saving the planet.

UPDATE: BusinessGreen reports that after the publication of this story, a DECC spokesperson has said the department will tackle the subsidy loophole ‘as soon as possible’:

‘As we indicated in our Government response to the FiTs consultation published in July, DECC takes the issue of turbine de-rating seriously,” she said. “We have acted to address this issue for hydro sites and are committed to doing the same for wind. Following publication of the response we have already met with representatives from the sector to take this forward’

However, DECC have yet to provide any concrete timings or details on how they intend to do this. The government stated they were aware of de-rating in their consultation paper im July 2012, so for now the scam continues.

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Show comments
  • Phillip Bratby

    I could devise, in a few seconds, a FiT scheme that would sort this problem out. It will take an army of DECC bureacrats months (if not years) and cost us taxpayers a fortune to do it. They’d probably still make a mess of it even then.

  • Thon Brocket

    Round here we hardly ever use double-decker buses to measure things. A bus doesn’t fit in your pocket, or even in a big tool-box. So we use metres. Except Gramps Simcoe in the finishing shop. He still still talks about something called a “boot” or a “feet” or something Biblical like that.

    You’re writing for the Spec, not the Sun.

  • jeffrey davies

    ah the wind masts we pay for then pay again for electric never seen a country where the populations hels to ransom over these things that the owners downgrade their power outlet just to claim higher monies nah leave the owners pay to erect and then perhaps we see a level playing field

  • William Blakes Ghost

    One has to look on in disbelief at the sheer stupidity of this government’s energy policy (amongst many stupid policies) and the weak impotent pandering of it to the energy industry. If ever there was an example of how this government is failing the British people it is this ridiculous energy policy straight out of Libdem La-La Land!

    The thing is it is becoming increasingly evident that the Tories pure unadulterated stupidity is as debilitating as Labour idelogical delusion. The country is screwed.

    • HooksLaw

      Its a libdem tory coalition. Of course we could split the right wing vote and improve on that by delivering a lablib coalition or even put ex energy minister Mr Miliband in power on his own.
      Its a tough choice for you I can see.

      The libdems of course were unhappy with the recent announcement about gas energy and lack of carbon targets. All of which labour disagree with as well.

  • salieri

    I wonder if it is true to say that “even the most ardent supporters of renewable energy would agree that wind turbines should be erected only when the output is worthwhile”. Of course it depends on what you mean by worthwhile, but if you mean financially efficacious I would beg to differ. In some quarters you get the impression that any green policy must be worthwhile if it meets the criterion for saving the planet – i.e. if it allows eco-fascists to feel good about themselves.

  • Karl Hungus

    ‘blot a corner of the British countryside’… ‘ruin the landscape’

    Comments like this are incredibly subjective, and don’t help the debate. Does the author even live in a rural area?

    A few weeks ago I went up to have a look at a wind farm near Teesside from a hill near my home in the Dales.

    There was another fella up there taking photos. I stopped for about 15 minutes to take care of my sandwiches. During that time other groups of walkers stopped to look, cars slowed down and even stopped, children pointing excitedly etc. The various responses suggest to me that opposition to turbines is less a reflection of the views of the community than that of a vocal but unrepresentative minority.

    Does n’t alter the point about de-rating, of course, but the hysteria only distracts from the argument.

    • David Cooper

      The facts remain that wind power can never provide a reliable base for power generation in this country. The biggest current social problem is that of housing – our your people cannot afford children so the State imports them instead. That is because the Town and Country planning act protects the countryside. Why bother?

      Nuclear power is the ONLY low CO2 energy sources. But voters believe in fairies…

      • Daniel Maris

        Tell that to the Danes who are already producing 33% of their electricity with wind energy and plan to get up to 50% in the next few years.

        • HooksLaw

          Denmark had to stop land based farms because of public objection. it has not closed down a single conventional power plant and it does not know how to dispose of its broken non recyclable composite windmill blades.
          All that will happen in the future is that Denmark will become more reliant on its neighbours for power.

          • Daniel Maris

            There is no problem with Denmark linking with free democratic countries on energy supply.

            • Rhoda Klapp

              There is however a problem with claiming that happy Denmark can do 33% when it is really a case of a smaller perecentage adding in power stations which are not in Denmark. There is no way to get to 33% overall with security of supply unless there is a large idle backup. Denmark relies on its neighbours and therefore is no more than a greenwashing parasite.

              • Daniel Maris

                No, as I understand it, the 33% figure relates to electricity generated by wind turbines in Denmark as a percentage of the total energy consumed (i.e. including the energy supplied from outside Denmark).
                Denmark aims to produce 100% of its energy (not just electricity) as green energy from within Denmark by 2050. I see no problem with it reaching that figure. I think you are underestimating their determination, their ingenuity and their tenacity.

                • the viceroy’s gin

                  So let’s see, as you “understand it”, and you “see no problem”… is that it?

                  And yet, by your own admission, you are uneducated and completely ignorant and incapable of speaking in any level of technical detail whatsoever on these matters, so your understandings and seeings are worthless.

            • the viceroy’s gin

              Then why is it you eco nutters always shriek hysterically about “energy independence”?

              • Daniel Maris

                Well I draw a distinction between being dependent on trustworthy democratic allies and being dependent on Arab potentates or Russian oligarchs. However, I would still be looking to maximise energy self-sufficiency and fortunately in the UK with all our tidal, wave, wind, hydro, coal, gas and other resources we could easily be 100% energy independent.

                • the viceroy’s gin

                  Hmmm, so which is France, an Arab potentate or Russian oligarch?

                  I mean, since it appears you eco nutters are shrieking hysterically about imports from them.

                  And again, what qualifications do you have to assess the UK’s pottential for energy development? By your own admission, you’re ignorant and uneducated in this regard.

    • Daniel Maris

      I think it depends where they are. I wouldn’t want them in the middle of the Lake District. But many of our hills really are pretty dull, scrubby and uninspiring and the addition of the turbines does – for me at least – add an air of mystique and romance to them. I can understand local people not wanting one too close up or blocking their familiar view – but I think that underlines the need for everyone in teh community to benefit from their presence, not just landowners and once again we should see how the Germans handle that.

      • the viceroy’s gin

        Hey, if you like them, great. You should pay for them, as you’re the one who likes them. Instead, the eco nutters make everybody else pay for what they like.

        • Daniel Maris

          I don’t like nuclear power stations. I still have to pay for them. Are you going to pay for my share of the huge nuclear energy bill?

          • the viceroy’s gin

            No, you pay for it, since you’re the one who favors putting a gun to the People’s head and forcing them into such.

          • HooksLaw

            This is you exposing your prejudice. Why should nuclear be bad?

            • Daniel Maris

              Ask the people of Fukishima first.

              There are a number of reasons:

              1. Risk of catastrophic failure (including intentional terrorist strike or sabotage, including by workers).

              2. The creation of the secret state that goes with nuclear – with regard to 1, every single worker in a nuclear plant has to be given a security check for instance. The nuclear police were the first armed police in Britain.

              3. The particular dangers on a small island of a nuclear catastrophe – millions could be displaced and huge swathes of agricultural land rendered unusable for years or even decades.

              4. The poison legacy we leave to our descendants for tens of thousands of years. Immoral.

              5. Pollution.

              6. Unrealiability. In France in extremely hot summers many water cooled reactors had to be shut down. There was a year recently when we had about 7 down at one time I think it was. Down time on nuclear reactors is pretty high. Their super-reliability is a myth.

              7. Nuclear is costly – new nuclear even more so. More costly than onshore wind currently and far more costly than gas. And there are huge hidden costs e.g. the anti-terrorist measures that never get accounted for. How many people are working in MI5 etc on nuclear security?

              • the viceroy’s gin

                Sorry, but as you’ve previously acknowledged, you are spectacularly unqualified to make most of your above assertions.

      • salieri

        An air of mystique and romance? That’s what they once said about airports. But at least airports have a genuine commercial purpose. As for everyone in the community needing to benefit from their presence, that merely begs the question whether their presence is needed at all. And it’s horribly patronising to the ‘local people’ you so graciously understand.

      • HooksLaw

        Read above – even in your Denmark they objected to land based farms. i am not even sure that wind farms are green. They are in the middle of nowhere or miles off coast and you have to build links to the grid.

    • Thon Brocket

      Yep. To my colonial-raised eye, the Great British Landscape – the division that accommodates wind turbines at least – is a bleak and unattractive wasteland, much improved by the addition of platoons of Windy Millies at random intervals. Which doesn’t mean that I like them so much that I want to subsidise them.

    • Kevin

      A positive opinion is not less “incredibly subjective” than a negative one.

      I agree with Sebastian. The wind farms I have seen do ruin the landscape. I wish they did not exist and I would cast my vote for a party that removed them.

      This is what politics is for.

  • Hexhamgeezer

    This is what happens when business operates under socialist economics.

    • dalai guevara

      This is what happens when business operates under rules of an oligopoly.

      • the viceroy’s gin

        This is what happens when poorly educated rubes involve themselves in matters they are completely ignorant of.

        • dalai guevara

          Again, let’s summarise so we do not lose track of who’s talking here:

          1- ‘now watch that drive’ Dubya groupie
          2- nuclear door salesman
          3- policing aspirations, but not running for commisioner, so likely to have a previous conviction
          4- economically challenged, cannot tell the difference between QE and windmill subsidies
          5- spiritually troubled, does not know what Jesus stood for
          6- does not pay taxes, but nonetheless believes his views should be represented
          – apparently unaware of recently much-published DC2UKIP insults: he must be a closet fruitcake.

          If ignorance was bliss you would be a…God.

          • the viceroy’s gin

            …poorly educated and verbose rubes, to clarify.

            I do enjoy the fantastical delusions, mind you, numbered even!

            • dalai guevara

              You are repeating yourself, with such short breath. Were you brought up without sports, just watching Teletubbies ad infinitum?

              • the viceroy’s gin

                Is that what the voices are telling you to ask?

  • Gerry Dorrian

    Sounds pretty much like how Soviet factories used to exercise quality control, by weight rather than anything resembling utility. Why haven’t the Conservatives fixed this abuse? They’ve had half a term!

    • Heartless etc.,

      Um . . wait for the H2B to begin – as will doubtless come to pass – the weekly recital of Tractor Stats in the Brownian Style. Only now they will be in regard to Windmills Erected, Ourput per Windmill, Best output per WindFarm, Total WindFarmage, and as many other bullshitty stats as can be harvested, – and all this to convince the gullible that It’s The Right Thing To Do.

      And of course, under a separate column, will be details of recidivists who fail to ‘toe the green line’.

    • Thick as two Plancks

      Does the H2B know the difference between a kilowatt and a kilometre?

  • Daniel Maris

    All this does is confirm what I have always said: which is that FiTs are a very bad way of funding a green energy infrastructure. I suspect they are more about protecting the position of existing energy monopolies and oligopolies who otherwise might be presented with direct competition.

    Anyway, for me the best way to go is to fund via stamp duty which then creates a direct and lasting benefit for the stamp duty payer in terms of reduced energy bills and generation income.

    However, no doubt this story will be used as a stick to beat wind energy, despite the fact it is already providing 33% of Denmark’s electricity.

    There is so much dishonesty in the reporting of wind energy. This week we had the headline in the Telegraph saying “Wind farms add £178 to energy bills.” It was a complete lie. The figure actually covered ALL forms of subsidy for non carbon based energy, including subsidy to new nuclear, and waste incinerators. I think it also included for new transmission lines, many of which would be needed whether or not you have green energy production.

    • itdoesntaddup

      You’re right, it was a complete lie. It excluded the already planned increases, and merely admitted to the incremental ones to be approved by the new bill.

      • Daniel Maris

        OK, I see you have no concern about standards of truth in our national newspapers.

        • itdoesntaddup

          For some real economy with the truth you an always try Roger Harrabin at the BBC…

          • Daniel Maris

            I’m not an AGW believer, so I don’t have to defend him.

    • HooksLaw

      The fact that the press are ignorant does not hide the fact that the green energy business is a scam. Its deep rooted, I am sure someone will bring common purpose into it any minute, but it is a total load of cobblers.
      The energy infrastructure needs funding of course and either the taxpayer or the user are the only ones available.

      Wind energy in Denmark is a failure. They have to import energy from their neighbours when the wind stops.

      I should point out that by Christmas we will be delivering electricity to the grid from cells on our roof. I am not sure if the payback period is worth it, but my wife likes the idea. The paying in tarrif is currently far lower than it was a few years ago and is likely to fall steadily in the future.

      • Daniel Maris

        You are just perpetuating ignorance on this subject HooksLaw. Do you really think it has never occurred to Danes that wind turbines don’t work when the wind stops? I am sure even the pigs of Denmark would object to such pig ignorance.

        • the viceroy’s gin

          Of course it occurred to them. They’re not uneducated and technically illiterate rubes like you.

          They understand that they have to pay for, build and capitalize firm generating capacity, so as to meet that firm demand, meaning they have to pay for both that firm capacity AND your subsidized and inefficient windmills.

          Not that you understood the above sentence, but others likely do.

    • realisticgreen

      “However, no doubt this story will be used as a stick to beat wind energy, despite the fact it is already providing 33% of Denmark’s electricity.
      There is so much dishonesty in the reporting of wind energy.”

      Now tell us all the honest truth about :-
      1/ The position of Denmark in a table of European energy costs ?
      2/ Is subsidy needed in Denmark in order to keep industrial energy costs from causing businesses to decamp to other countries (or go into liquidation)?

      • Daniel Maris

        1. Denmark’s energy costs are v. high but as Dalai has pointed out before, Denmark’s energy efficiency is much higher than ours, so higher energy costs don’t necessarily translate through to higher energy bills.

        2. I don’t know about Denmark’s subsidy arrangements are but I wouldn’t be surprised. The key fact I think is that Denmark has taken control of its destiny and gone on to the right path. Denmark incidentally is the happiest country in Europe and one of the wealthiest. It hasn’t suffered any harm from its green energy policy, contrary to all the doom-sayers’ claims here.

        Let’s have an open and honest debate about energy, not this absurdly dishonest playground fight.

        • the viceroy’s gin

          Provide hard data to backup your assertions re Denmark’s overall energy efficiency, their energy bills, and the effect of their allegedly much higher energy efficiency on those energy bills.

          Hard data and links, please. Your opinions are worthless, as you’ve previously acknowledged in here that you’re uneducated and ignorant of these matters.

          Additionally, provide hard data and links as to the subsidies that Denmark provides.

        • realisticgreen

          I am puzzled that you think the statement :- “Denmark incidentally is the happiest country in Europe …” is related, in any way, to their policy on windmills?
          Why not mention that (in the same ‘survey’) Costa Rica rates higher than Denmark in the “Average Life Satisfaction” table ? Clearly nothing whatsoever to do with windmills or energy policy.