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Kwasi Kwarteng tackles wind farms over contracts

The Times|Emily Gosden|June 25, 2022
United Kingdom (UK)Electricity Prices
The business secretary has summoned two offshore wind bosses for meetings over their “exploitation of British bill payers” after they used a contract loophole to cash in on soaring power prices. Officials fear that consumers could pay hundreds of millions of pounds more than expected for electricity from the new Triton Knoll and Moray East wind farms after the developers delayed activating contracts to supply power at about half the current market prices.

Kwasi Kwarteng, the business and energy secretary, has written to company owners demanding meetings with them and urging them to “act fairly”
 
The business secretary has summoned two offshore wind bosses for meetings over their “exploitation of British bill payers” after they used a contract loophole to cash in on soaring power prices.
 
Officials fear that consumers could pay hundreds of millions of pounds more than expected for electricity from the new Triton Knoll and Moray East wind farms after the developers delayed activating contracts to supply power at about half the current market prices.
 
Kwasi Kwarteng has written to the company owners demanding meetings within the next week and urging them to “act fairly”. In the letters, seen by The Times, he warns that the government plans to prevent others acting the same way in future, adding: “I am incredibly disappointed in how the activity of a few generators could have such a profound impact on the future arrangements of the wider generation market.”
 
The warning comes as the Treasury ... more [truncated due to possible copyright]
     
Kwasi Kwarteng, the business and energy secretary, has written to company owners demanding meetings with them and urging them to “act fairly”
 
The business secretary has summoned two offshore wind bosses for meetings over their “exploitation of British bill payers” after they used a contract loophole to cash in on soaring power prices.
 
Officials fear that consumers could pay hundreds of millions of pounds more than expected for electricity from the new Triton Knoll and Moray East wind farms after the developers delayed activating contracts to supply power at about half the current market prices.
 
Kwasi Kwarteng has written to the company owners demanding meetings within the next week and urging them to “act fairly”. In the letters, seen by The Times, he warns that the government plans to prevent others acting the same way in future, adding: “I am incredibly disappointed in how the activity of a few generators could have such a profound impact on the future arrangements of the wider generation market.”
 
The warning comes as the Treasury examines what it says are “extraordinary profits” that some power generators are making, with the threat of a windfall tax or urgent market reform.
 
To support investment in offshore wind farms, the government gives developers contracts that guarantee consumers pay a fixed rate for the electricity they generate. When market prices are below this rate, consumers pay them subsidies; when they are higher, the wind farms pay back the difference.
 
The gas crisis has driven the price of electricity far above the record low contract prices awarded to wind farm projects in 2017, including Triton Knoll, majority owned by RWE, and Moray East, majority owned by Ocean Winds, an Engie-EDPR joint venture.
 
Both wind farms are now fully operational but their owners have pushed back the contract start dates for Moray East and the third phase of Triton Knoll by a year, enabling them to cash in on higher market prices. There is no suggestion they have broken any rules.
 
In letters to Tom Glover, RWE’s UK boss, and Dan Finch, managing director of Ocean Winds, Kwarteng said the delays were “undermining public trust in the mechanism”.
 
Glover confirmed that “by delaying it we are able to make more money in the market” but insisted: “This is not a loophole, this is a contractual right.” The first two phases of Triton Knoll are already paying back to consumers.
 
Moray East has previously said that it will start its contract “within the contractual terms set by the process”.

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Source:https://www.thetimes.co.uk/ar…

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