Developers are to be handed more cash to erect wind turbines and solar farms near towns and cities in a bid to get more power generation near to where it is needed.
Renewable energy companies will be allowed to charge customers more for their power if they generate it close to where it is needed, rather than in sparsely populated parts of the country.
The scheme, to be formally announced on Tuesday by Claire Coutinho, the Energy Secretary, is designed to trigger a rush to build wind and solar infrastructure on farmland around cities.
However, the policy is also likely to prove highly controversial with environment groups because of the likely impact on treasured landscapes.
The Government will introduce zonal pricing, with generators paid different rates according to the distance between their assets and consumers.
The UK will be divided into about half a dozen generating zones so that onshore wind and solar farms in the Home Counties could be paid more for their power than those in Scotland, for example.
Research by Ofgem suggests that making electricity prices higher in the South East, where demand is strongest and supply weakest, would incentivise solar developers.
They would be encouraged to buy up swathes of farmland in a region stretching from London to Bristol and up to Norwich and Cambridge for solar parks and wind farms.
A key aim is to halt an increase in ‘constraint payments’ – where wind and solar farms are paid to turn off their generators to stop them overloading the grid at peak times.
This is particularly a problem when energy companies build wind farms in remote northern locations with insufficient grid connections to carry their power south. This can cause infrastructure to be overloaded at times of high wind.
Operators can claim compensation payments for switching off in order to prevent power surges. Last year this added more than £300m to consumers’ bills.
A key aim is to halt an increase in ‘constraint payments’ – where wind and solar farms are paid to turn off their generators to stop them overloading the grid at peak times.
This is particularly a problem when energy companies build wind farms in remote northern locations with insufficient grid connections to carry their power south. This can cause infrastructure to be overloaded at times of high wind.
Operators can claim compensation payments for switching off in order to prevent power surges. Last year this added more than £300m to consumers’ bills.
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