EDF Energy to pay £6m to Ofgem from regulation breach

EDF Energy to pay £6m to Ofgem from regulation breach: After confirming it breached wholesale energy market regulations, EDF Energy Thermal Generation (EDF ETG) has agreed to pay £6 million to Ofgem.

The regulator reported that between September 2017 & March 2020, EDF ETG frequently sent misleading signals to the National Grid Electricity System Operator (ESO) concerning the capabilities of the West Burton B power plant and “frequently inflated” the lowest measure of power that it said it could supply.

EDF ETG did this in durations when the plant was not expected to generate energy which lead to the ESO needing to buy more power from the plant than was necessary when the plant was used to balance the system.

This indicated that it did not “reasonably reflect the expected true operating characteristics” of a producing unit and gave ‘false or misleading signals’ as to the amount of wholesale energy products.

Ofgem says EDF ETG thought this method could allow it to provide the ESO with lower prices but it really led to the ESO spending unnecessary money when trying to balance the system. It does not aim to open a formal investigation into the matter.

Cathryn Scott at Ofgem stated: “This case further demonstrates Ofgem’s commitment to monitoring wholesale energy markets in Great Britain and ensuring their integrity on behalf of consumers.

“Ofgem’s enforcement action sends a strong signal to all energy market participants that they must submit accurate data to the ESO. If they don’t, we have the powers to intervene and we are ready to use them.”

EDF ETG responded: “EDF ETG takes this issue extremely seriously and apologises for the error.

“Although the breach was inadvertent, and EDF ETG considered its approach would reduce costs for the electricity system operator, we should have done better. We have taken swift action to prevent any reoccurrence. We have changed our approach and ensured it is fully aligned with the clarification in Ofgem’s latest guidance (Open Letter, 29 September 2020) and put in place new governance arrangements to ensure ongoing compliance.”

EDF Energy to pay £6m to Ofgem from regulation breach

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