Wind farms investigated after ‘overcharging customers by £100m’

Ofgem has tackled some recent cases of overcharging. Last year it recovered £77m in fines, customer refunds, and compensation from power suppliers, up from £27.3m in 2022.

Many of these penalties were for overclaiming on constraint payments. In January 2023, electricity generator Drax Pumped Storage Limited had to pay £6m after overclaiming for the power it was told not to generate.

Last June, Ofgem told SSE Generation Limited (SSE) to pay £9.8m for seeking excessive payments from NGESO in relation to its Foyers pumped storage power station in Northern Scotland.

Another generator, EP SHB Ltd, was told to repay £23.6m last October after overclaiming on constraint payments for its South Humber Bank gas-fired power station.

An Ofgem spokesman said it disagreed with the Renewable Energy Foundation’s claim that wind farms could name their price for turning down generation, but confirmed an investigation was underway.

He said: “We already have a robust set of rules in place which explicitly exist to prevent generators from abusing the energy market in such circumstances. We have required several generators to make multi-million-pound payments in the last year alone where those rules have been breached.”

The spokesman added that REF’s allegations were now subject to investigation.

He said: “Ofgem works with [NGESO] to look into alleged improper behaviour of wind farms and other generators. We’ll consider all the facts and if evidence of a breach of market rules is found we will not hesitate to act. 

“We are also currently consulting on whether any changes are required to the licensing rules in this area.

“We have passed figures provided by REF to our Generation Licence casework team, which will look into any report of potential market manipulation and assess each report on a case-by-case basis.”

Renewable UK, the trade body for the wind energy industry, said: “As the independent regulator Ofgem is best placed to comment on this.”