1st October 2026
There is a question that is increasingly being asked across the north of Scotland, and it sounds almost absurd when put in its simplest form.
Why are we sometimes paying wind farms to stop producing electricity at the same time as Britain is looking for more electricity to power new industries?
The answer is that electricity is not necessarily produced where it is needed.
Scotland has become a major electricity producer, particularly from renewable sources. But much of the generation is in the north, while a large proportion of electricity demand is further south.
When the wind is blowing strongly, the problem can become particularly obvious. There can be more electricity being generated in Scotland than the transmission network can safely move to other parts of Britain.
NESO, the National Energy System Operator, explains that when a transmission bottleneck is reached it can have to ask generators to reduce their output. Those generators receive constraint payments for doing so. At the same time, generation elsewhere can be increased to maintain the balance of the system.
NESO's figures show just how significant this has become. In 2024–25, wind curtailment reached 13% of hypothetical wind output, with Scotland accounting for the overwhelming majority of Great Britain's wind curtailment.
This is where the argument becomes interesting.
It would be easy to conclude that Scotland has simply built too many wind farms.
But that isn't necessarily what the figures are telling us.
They may instead be telling us that we have built electricity generation faster than we have built the transmission network and the electricity demand needed to make full use of it.
And now the National Energy System Operator is effectively asking us to consider another part of the solution.
In May, NESO chief executive Fintan Slye said that locating large electricity users, including AI data centres, closer to Scotland's renewable generation could reduce the need to pay wind farms to turn down and other power stations to turn up. NESO said that decisions about where new demand connects should become part of long-term, whole-system energy planning.
That is a potentially important change in the way we think about energy.
Instead of building generation in one part of Britain, transmitting it over increasingly busy networks and then finding somewhere to put the businesses that need it, perhaps we should increasingly be asking a different question.
Where is the electricity, and what electricity-intensive businesses could sensibly locate there?
Scotland is already producing extraordinary amounts of renewable electricity. Scottish Government figures published this week show that 9.1TWh of renewable electricity was generated in Scotland during the second quarter of 2026, the highest renewable generation in any second quarter on record. Renewable generation capacity had reached 18.4GW by the end of June.
At the same time, Scotland remains a net exporter of electricity because its generation capacity is far greater than its domestic demand. NESO currently expects that situation to continue, with around 38GW of generation capacity compared with roughly 6GW of gross demand by 2030 under one of its scenarios.
So there is a huge potential economic question.
Could Scotland attract more industries that use large quantities of electricity precisely because the electricity is available here?
The arrival of artificial intelligence and huge data centres has made the question much more urgent. But data centres are only one possibility. Other electricity-intensive industries, manufacturing, storage, hydrogen production and other emerging technologies could also become potential customers for Scotland's abundant electricity.
There is a crucial qualification.
Simply putting a giant electricity user somewhere in Scotland does not automatically solve the problem.
Location matters.
Evidence given to the Scottish Parliament last month by University of Strathclyde academic Dr Callum MacIver was particularly interesting. He told MSPs that two data centres using exactly the same amount of electricity could have completely different effects on the electricity system depending on where they connect. If one is on the wrong side of a network bottleneck, it may do little to reduce constraints.
That is an important warning against assuming that every proposed data centre is automatically good news for Scotland.
A second problem is that a data centre needs electricity continuously. It cannot simply use wind power when the wind is blowing and shut down when it is not. Reliable electricity still requires a wider system including the grid, storage and other forms of generation.
But there is already evidence that flexible electricity demand can help.
NESO's Local Constraints Market has been designed to reward businesses and consumers for increasing electricity demand when supplies are abundant. NESO says the approach can reduce the need to pay generation assets to stop producing electricity. It is now being expanded into a wider flexibility service across Great Britain.
That suggests the future electricity system may become considerably more complicated than simply building more power stations.
We could see a combination of more generation, bigger transmission networks, batteries and other storage, flexible demand and major electricity users deliberately locating close to areas where renewable generation is plentiful.
And this brings the story directly to Caithness.
The north is already at the centre of enormous electricity infrastructure investment.
The Caithness–Moray link is operational, using a 113-kilometre subsea cable between Spittal in Caithness and Blackhillock in Moray. SSEN Transmission is now constructing another major 2GW subsea link between Caithness and Aberdeenshire. Construction began this year.
These projects are designed partly to move electricity out of the north.
But perhaps we should also be asking what could be brought into the north because of the electricity that is being generated here.
That is a different approach to economic development.
For decades, Caithness has tended to look south and ask how we can get better roads, better railways, better broadband and better connections to the rest of Britain.
Those things remain important.
But electricity could become another form of economic infrastructure.
Dounreay has already given Caithness generations of experience in nuclear technology and the wider energy industry. Renewable generation is expanding rapidly. The transmission network is being transformed.
Perhaps the next question should be what industries can be attracted to a place where large quantities of electricity are being generated.
There is no guarantee that the answer will be a huge data centre. Nor should every proposed development automatically be welcomed simply because it consumes electricity.
Jobs, housing, water, transport, telecommunications, environmental impact and the wider benefit to the local economy all matter.
But there is a fascinating opportunity here.
Instead of regarding wind-farm constraint payments simply as an argument against renewable generation, perhaps we should regard them as a warning that generation, transmission and demand have not yet been properly joined together.
We are building an electricity system for a very different Britain.
The opportunity for Scotland is not simply to generate more electricity and send it elsewhere.
It may be to ask what we can build beside the electricity.
And for Caithness, that could turn out to be one of the most important economic questions of the next 20 years.