SSE said it cooperated fully with the investigationīy settling the investigation early, SSE qualified for a discount on the £11.6m it would otherwise have been required to pay by Ofgem. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. For more information see our Privacy Policy. Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. However, it added that SSE and its senior management should have realised that its revised approach “carried a significant risk” of breaching the terms of its transmission constraint licence condition.
The regulator said it had not seen any evidence that SSE’s breach of its licence was deliberate. It opened an investigation into SSE Generation in October 2021. Ofgem said SSE made the change to bring Foyers in line with what it believed was the market practice of other pumped-storage operators and to increase its profit. SSE changed the bid prices it charged National Grid in May 2020, which the regulator said made it “significantly more expensive” to reduce Foyers’ output, including in periods of transmission constraint. The regulator found that the company breached its licence after securing excessive payments in exchange for reducing its output at Foyers. The SSE penalty relates to its Foyers hydro pumped-storage power station, located in the Scottish Highlands. The ESO can take action in the market to increase and decrease the amount of electricity available at different locations on the network. Transmission constraint can occur when the electricity transmission system is unable to transmit power from where it is being produced to where it is required, due to congestion in the network.
“If they fail to do so, they will face significant consequences.” She added: “This enforcement action sends another strong signal to all generators that they must put in place controls to ensure that their bid prices are set in a way that ensures that they do not obtain excessive benefits during transmission constraint periods. As a result, Ofgem has issued a penalty of £9.8m to SSE Generation.Ĭathryn Scott, the director of enforcement and emerging problems at Ofgem, said the regulator would “continue to monitor the wholesale energy markets in Great Britain and ensure their integrity on behalf of energy users”.
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