3rd Sep 2020 09:24
(Alliance News) - The Office of Gas & Electricity Markets on Thursday said its has issued a GBP2.1 million fine to SSE PLC over a failure to publish inside information about the wholesale energy market.
The UK regulatory body said that in March 2016, the FTSE 100 energy supplier inked an agreement with National Grid PLC to provide Black Start capability at any one of three generating units at its Fiddler's Ferry power station from April 1 that year. SSE had previously said the three units concerned were likely to close on March 22.
Black Start is the procedure to recover from a total or partial shutdown of the transmission system which has caused an extensive loss of supplies. This involves isolated power stations being started individually and gradually being reconnected to each other in order to form an interconnected system again.
Ofgem said the units had a combined generating capacity equivalent to 3% of Great Britain's peak electricity demand and therefore had a significant impact on demand and supply in the country, affecting wholesale prices.
It added its investigation found that SSE's non-binding agreement with National Grid and its decision to retain transmission entry capacity for the three units reversed the likelihood that the three units would close. As a result, the agreement was likely to have a significant effect on wholesale prices, and was therefore inside information.
The regulator said SSE did not publish the information when it should have and instead waited until the end of March when the contract was finalised.
It noted that SSE's delay in making a public announcement resulted in four days trading without the market knowing that more generation was likely to be available than previously thought, adding that this likely led to some market participants paying more for wholesale electricity than they should have.
Ofgem said its investigation found that SSE did not act in bad faith, noting that the Regulation on Wholesale Energy Market Integrity & Transparency which required the energy supplier to disclose the information was a relatively new one at the time.
"SSE's failure to publish inside information in a timely and effective manner resulted in market participants trading for four working days under a false impression of supply availability in GB's electricity market. This meant that market participants were likely to have paid higher prices than they needed to, and risked undermining confidence in the wholesale electricity market. This fine sends a strong message to market participants that they must be familiar with, and keep to, their obligations under REMIT rules or face enforcement action by Ofgem," said Ofgem Chief Executive Jonathan Brearley.
Shares in SSE were trading 0.5% higher at 1,266.00 pence each on Thursday morning in London.
By Ife Taiwo; [email protected]
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