UK Energy System, Part 1: The REAL Cost of Wasted Wind

By now, we’re all familiar with the sentiment; electricity that has been mostly generated in Scotland, and mostly from wind turbines, is not always able to be transmitted to end-consumers, costing us all more money on our energy bills.

But why do these headlines, only 4 months apart, give such a range of figures, from £350m to £1.5B and “billions”?

Let’s cut through the noise.

Constraint costs vs Wind Curtailment costs - What’s the difference?

The figures quoted above vary so wildly because the different media outlets are conflating (and sometimes just completely mistaking) curtailment costs and total constraint costs.

To understand the difference, let’s use an example:

When electricity cannot be delivered from point A, let’s say a wind farm off the coast of North East Scotland, to point B, a hospital in Leeds, this is because of a grid constraint.

Below is a snapshot from GB Renewables Map at 12:30 on the 29th January 2026 showing a lot of wind in the aftermath of Storm Chandra.

Transmission Boundaries

The red lines outline ‘transmission boundaries’ which are essentially bottlenecks in the system of transmission pylons, the points at which the flow of electricity is limited. From North to South, they are the B2, B4 and B6 boundaries. As you can see in this snapshot, all 3 are constrained, as is the case more than 1/3rd of the time currently.

The B2, B4 and B6 Transmission boundaries are constrained over 33% of the time. Source: GB Renewables Map

There are a number of causes for grid constraints that I won’t cover in this blog, but this is to demonstrate that a problem is created on both sides of the constraint.

Above the red lines is excess energy, and below there is a deficit - this must be addressed to avoid power surges & outages.

Wind Curtailment Costs

Going back to our example: At Point A, the Scottish wind farm is producing excess energy that must be managed. One way to achieve this is via curtailment. This is where wind turbines physically alter the angle of the blades to reduce energy generation, curtailing their output.

This action was taken to keep the system in balance and protect infrastructure and not because the energy is not needed by the market. Therefore the wind farm is still compensated for the energy it could have generated.

These are curtailment costs, which in 2025 came to £385m.

Total Constraint Costs

Moving to Point B, the hospital in Leeds is now short of energy. To manage this, a gas peaking plant (which is a power plant on standby waiting for events of electricity shortage) fires up - at considerable expense and inefficiency - to provide the required energy. This cost of this process in 2025 came to £1.085B.

It's here we arrive at the total constraint costs of ~£1.5B in 2025.

Where Bitcoin mining slots in - and where it doesn't

Bitcoin mining has long been endorsed by the Bitcoin community, and forward thinking institutions such as KPMG, as the perfect solution to energy that is locationally constrained. And broadly speaking it is, with a few caveats.

Whilst Bitcoin mining as a flexible and dispatchable load is leagues ahead of other technologies touted as ‘demand sinks’ such as hydrogen electrolysis, electric arc furnaces or direct air capture (and I plan on publishing a blog peeling back the layers to show why), it still has limitations.

Bitcoin mining’s economic reality

Bitcoin mining is a highly competitive industry where electricity prices, load factor (uptime) and network difficulty exist in a delicate balance which determines overall profitability. The lower the load factor % falls, the more competitive electricity costs must be to pencil the economics.

I often hear suggestions of how “the solution is obvious, we should locate Bitcoin mining next to wind farms and absorb the excess energy”. This is great in theory, but more challenging in reality. Back-of-the-envelope modelling shows a problem.

Let's take the worst-offending wind farm in GB: Seagreen offshore wind farm:

Seagreen Offshore Wind Farm off the East cost of Scotland was curtailed 63% of the time in 2025

If you go back to the 29th Jan snapshot, that big circle off the coast of Dundee represents the live ‘most curtailed wind farm’ which - you guessed it - is Seagreen offshore wind farm, the largest in Scotland and the fifth largest globally.

In 2025 it was curtailed 63% of the time it could have been generating, at a cost of £30.5m to the energy consumer. Bitcoin mining looks like the perfect solution.

But going a layer deeper, offshore wind in Scotland has a capacity factor (generation output) of ~47.5%. Applying 63% curtailment would give us an estimated 29.9% uptime for Bitcoin mining, which is far from ideal. Then add in the economic incentives wind farms have to curtail, and it becomes extremely challenging to compete.

The significant potential for UK Bitcoin mining

The real opportunity lies at the constrained transmission boundary. It's here that the plethora of Scottish renewables (hydro, wind and biogas)all come together. This convergence is what drives more consistent excess energy, which at the right location is >50% of the time.

This is the focus of the National Energy System Operator’s (NESO) new market, Demand for Constraints, and is the long-term focus for RenewaBlox.

Electricity markets are layered on top of the power plants and pylons which generate and distribute our energy. These markets can unlock the potential for Bitcoin mining in the UK, but this is a rabbit hole for Part 2 of this blog: A whirlwind tour of UK electricity markets, coming next week.

In the meantime, for those of you that want to geek out even further on wind farm curtailment, and find out which are the most notorious, head to Wind Table: The Wind Farm Performance Tracker.

Enjoy!