EDF pays £6m after giving ‘misleading signals’ over plant capabilities

EDF Energy has agreed to make a voluntary redress payment of £6 million after Ofgem found the company “regularly sent misleading signals” to National Grid Electricity System Operator (ESO) over the true capabilities of its West Burton B power station in Nottinghamshire.

Between September 2017 and March 2020 – a period of two and a half years – EDF Energy’s thermal generation subsidiary “frequently inflated” the minimum amount of power – known as the Stable Export Limit – which it said the 1.3GW combined-cycle gas turbine plant was able to supply.

Ofgem said the company did this at times when the power station was not planning to generate, meaning the ESO had to buy more energy than would otherwise be necessary if the plant was required to balance the system.

In doing so, the regulator said the firm “inadvertently breached” its license obligations to comply with technical requirements under the Grid Code and the REMIT regulations prohibiting market manipulation.

Ofgem accepted that EDF did not expect its approach to result in increased overall balancing costs and that “by attempting to recover its fixed costs over greater volumes, its approach could allow it to provide the ESO with lower prices.”

However, the company also acknowledged that this “sometimes resulted in the ESO spending unnecessary money when trying to balance the system.”

The regulator has decided there is no merit in opening a formal investigation owing to “the company’s admissions, the steps it has taken to prevent reoccurrence, and the redress it has agreed to pay”.

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 Energy Thermal Generation (EDF ETG) said in a statement: “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 and put in place new governance arrangements to ensure ongoing compliance.”