Two companies have agreed to pay £6 million for breaching wholesale energy market regulations

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Between March 2019 and September 2020, ESB Independent Generation Trading Limited and Carrington Power Limited regularly submitted misleading data to National Grid Electricity System Operator (NGESO) about the minimum amount of energy the Carrington power plant could supply, Ofgem market monitoring has found.

According to the energy regulator, this caused NGESO to purchase more energy from the plant than needed, and at times spend more money than it needed to, to help it balance supply and demand on the system.

ESB Independent Generation Trading Limited (IGT) is the controller of the generation output of Carrington Power Limited (Carrington)’s power plant.

Cathryn Scott, Regulatory Director at Ofgem, commented: “Ofgem has taken strong action against another generator for submitting inaccurate data to National Grid Electricity System Operator.

“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.”

NGESO routinely buys power from power plants to prevent there being too much or too little power on the system. It relies on receiving accurate information from generators to make sure it can do so ‘economically and efficiently.’

The companies considered their approach compliant with their obligations and believed it would benefit the NGESO. Ofgem found that the companies ‘did not have the internal processes in place to ensure staff understood and applied the rules correctly.’

The companies subsequently took corrective action and have since confirmed that they have improved their compliance processes and training around market manipulation and submitting data to NGESO.

ESB Independent Generation Trading Limited and Carrington Power Limited have admitted that they inadvertently breached the rules.

Carrington has admitted it inadvertently breached its Grid Code and licence obligations around submitting data on its plant’s technical capabilities to NGESO.

IGT and Carrington have also admitted they inadvertently breached Article 5 of Regulation (EU) No 1227/2011 of the European Parliament and of the Council of 25 October 2011 on wholesale energy market integrity and transparency (‘REMIT’), which prohibits market participants from engaging in or attempting to engage in market manipulation.

The two companies have also agreed to pay £6m to the energy redress fund, managed by the Energy Saving Trust, that supports consumers in vulnerable situations.

Ofgem has now closed this issue, taking into account the companies’ admission of the breaches, the steps taken to avoid any future reoccurrence and the redress they have agreed to pay.

The compliance decision in this matter is available in full on the Ofgem website.