The UK could save billions of pounds each year by using excess wind power to generate green hydrogen, which would simultaneously fix the nascent H₂ sector’s “acute chicken-or-egg problem”, claims a new report.

The UK’s ailing electricity grid has failed to keep pace with its “world-class” wind turbine fleet, according to London think tank Policy Exchange in a study published today (Tuesday).

This means that the government is having to pay huge sums in curtailment fees to wind farm owners to switch off turbines when they are generating more power than is needed.

Some £210m ($267m) of curtailment payments were made to renewable energy generators to curtail output in 2022, said the report. Since 2021, power system congestion more generally has cost consumers over £2bn.

With the UK planning to grow its offshore wind capacity from 14GW today to 50GW by 2030, the report says that curtailment costs are expected to rise to £3.5bn annually by the end of the decade.

While onshore wind development in England has been all but killed off in the last decade due to draconian planning restrictions, the report highlights that Scotland’s 8.8GW of onshore capacity – planned to hit 20GW by 2030 – will see particularly high levels of curtailment.