WIND FARMS are unable to compete with traditional energy sources because the government's energy trading system forces them to predict the weather three and a half hours in advance, environmentalists warned this week.
This means that government efforts to promote generation of 10% of energy from renewable sources could fail, they said.
According to a consultation document published by the Department of Trade & Industry (DTI) last week, the government wants electricity suppliers to buy 10% of their power from generators using renewable sources.
The document says the government wants to see 5% of the UK's energy coming from wind turbines by 2010.
Under electricity and gas regulator Ofgem's New Electricity Trading Arrangement (NETA), introduced in March, generators must supply an agreed quota of power.
NETA quotas are set against forecast demand three and a half hours ahead of delivery. Firms failing to deliver their quotas are paid below the market price on an incremental scale. But for generators using renewable energy sources - in particular wind and solar power - it is almost impossible to predict supply accurately this far ahead.
The NETA tariff system means that 'if you are a few percent short you get hit with a punitive fine', said Friends of the Earth (FoE) climate and energy campaigner Mark Johnson.
The three and a half hour leadin time required by NETA favours operators of large coal, gas and nuclear plants, which take longer to fire up, he claimed.
FoE fears that until penalties are removed, the incentive to develop wind or solar generating capacity will not be strong enough.
FoE and industry body the British Wind Energy Association want Ofgem and the DTI to reduce the lead-in time to half an hour.
An Ofgem spokesman said NETA was being reviewed and that recommendations would be published at the end of the month.