The cost of paying wind farms to switch off during periods of low demand has reached £1 billion this year in Britain, a milestone achieved two months earlier than in the previous year. These "constraint payments" are issued when wind farms generate more power than the national grid can transport, forcing them to cease operations.
This situation necessitates the use of more expensive gas-fired power plants located near urban centers to meet demand. The £1 billion figure was tracked by Wasted Wind, a website supported by the energy supplier Octopus Energy. In 2025, constraint payments amounted to nearly £1.5 billion, and the current year is on track to set a new record. July 2 saw the highest single-day cost at £21 million.
The National Energy System Operator (Neso) predicts that these constraint costs could escalate to £3.2 billion over the next 12 months and potentially reach £8 billion by 2030. Constraint payments were introduced in 2010 and are paid out when renewable energy generation exceeds local demand and cannot be transmitted elsewhere due to inadequate grid infrastructure.
Specifically, a lack of sufficient transmission cables, particularly from Scotland to areas of high demand like the south of England, contributes to wind farms being switched off. Operators are entitled to compensation, known as constraint payments, for these shutdowns.
Greg Jackson, founder of Octopus Energy, described the current system as inefficient, comparing it to growing produce only to discard it and import more expensive alternatives. He advocated for utilizing wind energy to provide local, cheaper power, suggesting it aligns with government priorities on cost of living and devolution.
Multibillion-pound upgrades are underway to bolster the national grid, but these efforts are reportedly exacerbating the issue in the short term by requiring the temporary removal of cables from service. Neso had previously warned that the existing electricity market was not designed for net-zero targets and suggested regional pricing to reduce consumer costs. However, this proposal was rejected under the previous government due to concerns about creating a postcode lottery.
Neso stated its commitment to minimizing constraint costs but noted that long-term reductions depend on market reforms and network expansion, which are beyond the operator's direct control.