Two companies linked to a UK power station capable of supplying up to 1m homes are to pay £6m after breaking market manipulation laws.
For more than a year, ESB Independent Generation Trading (ESBIGT) and Carrington Power pushed up energy costs for households by sending inaccurate data to the grid.
The energy regulator, Ofgem, said the two companies had admitted to inadvertently breaching rules when they reported how much energy they were able to supply to the grid.
The companies recognised that they had “inadvertently breached” European rules by giving “false or misleading signals”.
They have agreed to pay £6m into a fund managed by Ofgem that supports charities that help vulnerable energy customers. By doing so they avoided a formal enforcement investigation.
The Ofgem regulatory director, Cathryn Scott, said: “Data accuracy is essential for keeping the costs of running the electricity system as low as possible for consumers.
“This case sends a clear signal to all generators that we are closely scrutinising their conduct and will not hesitate to act if they fall short of the standards we expect.”
Between March 2019 and September 2020 the more than 800-megawatt plant in Carrington, near Manchester, routinely sent inflated data to the grid at the request of traders at ESBIGT.
The company said in filings to the grid that the minimum amount of power it was able to produce was higher than was the case.
It also inflated the amount of time that the plant would have to run once it was started up.
The actions took advantage of a system designed to ensure there is enough power in the grid to feed all of Britain’s needs at any given time.
Because it is difficult to store electricity at scale, the grid needs to make sure that as much electricity is going in to the system as is coming out.
Once, this was a matter of changing how much coal was being burned at power plants, but now the grid has less control over electricity production, as much of it relies on the sun shining or the wind blowing.
So, when the wind stops blowing, the grid needs to be able to tell gas plants, such as the one at Carrington, to fire up quickly to meet the shortfall.
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It is therefore important that the grid knows exactly how much energy the gas plants and others can produce at a minimum, or how long they need to run for once started.
The companies said: “Compliance with its regulatory obligations is a priority for ESBIGT. We take this breach extremely seriously and apologise for the inadvertent breach of our obligations. We were disappointed not to have met our own high standards and took immediate steps to comply with Ofgem’s guidance.
“Corrective actions have been taken to prevent reoccurrence, with new governance arrangements in place to ensure ongoing compliance.”