EDF Energy to pay £6m to Ofgem after breaching market regulations

The energy firm admitted: ‘EDF ETG takes this issue extremely seriously and apologises for the error’

EDF Energy Thermal Generation (EDF ETG) has agreed to pay £6 million to Ofgem after admitting it breached wholesale energy market regulations.

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

EDF ETG did this in periods when the plant was not scheduled to generate energy, leading to the ESO having to buy more power from the plant than was needed when the plant was used to balance the system.

This meant that it did not “reasonably reflect the expected true operating characteristics” of a generating unit and provided ‘false or misleading signals’ as to the supply of wholesale energy products.

Ofgem notes EDF ETG believed this approach could allow it to provide the ESO with lower prices but it actually led to the ESO spending unnecessary money when trying to balance the system – it does not plan to open a formal investigation into the case.

Cathryn Scott at Ofgem said: “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 said: “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.”

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