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ESB Independent Generation Trading Limited and Carrington Power Limited agree to pay £6 million for breaching wholesale energy market regulations

Between March 2019 and September 2020, ESB Independent Generation Trading Limited and Carrington Power Limited regularly submitted misleading data to NGESO about the minimum amount of energy the Carrington power plant could supply, Ofgem market monitoring has found (1,2,3).

  • ESB Independent Generation Trading Limited and Carrington Power Limited submitted inaccurate data to National Grid Electricity System Operator (NGESO) about the amount of energy a power plant could supply, breaking rules around market manipulation
  • NGESO in turn bought more energy from the plant than needed, leading to higher costs for consumers
  • The two companies have admitted to inadvertent breaches, taken action to prevent it happening again and agreed to pay £6 million to the energy redress fund

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.

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 and have agreed to pay £6m to the energy redress fund to support 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 (4, 5). 

Cathryn Scott, Regulatory Director at Ofgem said:

“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.” 

Notes to Editors

  1. ESB Independent Generation Trading Limited (IGT) is the controller of the generation output of Carrington Power Limited (Carrington)’s power plant. 
  2. See our compliance decision for more details.
  3. From March 2019 to September 2020, Ofgem found Carrington, at the direction of IGT, regularly submitted data to NGESO which inflated its plant’s Stable Export Limit (SEL) above the minimum level at which the plant could, under stable conditions, export power. On some of these occasions, Carrington also submitted data to NGESO on request of IGT traders which inflated the plant’s Minimum Non-Zero Time (MNZT). This relates to the minimum time that a Balancing Mechanism unit (i.e. a generating plant providing balancing services to NGESO) must run for in response to an instruction to generate from NGESO. These practices both meant that NGESO was required to purchase a greater volume of power from IGT than needed when it instructed the plant to turn on and generate at its SEL. 
  4. Carrington has admitted it inadvertently breached its Grid Code and licence obligations around submitting data on its plant's technical capabilities to NGESO.  
  5. 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.  
  6. The Voluntary Redress Fund provides money to charities to deliver energy related projects that support energy consumers in vulnerable situations. It also helps to deliver benefits to consumers, who were negatively impacted by the specific issue that triggered the redress payment. For more information about Ofgem’s Voluntary Redress Fund, see: Ofgem appoints Energy Saving Trust to distribute payments from rule-breaking energy companies to charities.

For media, contact

Ruth Somerville: 020 7901 7460 / 07990 139504 ruth.somerville@ofgem.gov.uk

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Original article link: https://www.ofgem.gov.uk/publications/esb-independent-generation-trading-limited-and-carrington-power-limited-agree-pay-ps6-million-breaching-wholesale-energy-market-regulations

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