ESO to clamp down on wind generators’ inaccurate reporting

National Grid Electricity System Operator (ESO) is clamping down on wind generators who submit inaccurate information into the Balancing Mechanism.

All wind Balancing Mechanism Units (BMUs) will be subject to a new two-step process when submitting physical notifications (PNs), after the ESO uncovered “widespread evidence […] across the industry” of inaccurate reporting.

In an open letter to all market participants, the ESO states that the issue of inaccurate PNs has been “steadily increasing in severity and cost”.

“PN inaccuracy is one of our top priorities due to its impact on costs and system security, and the scale of improvement possible from market participants,” the letter states. “PN inaccuracies can result in excess balancing costs due to BMUs receiving payments based on deviations away from their PNs when a Bid-Offer-Acceptance is issued.

“PNs also provide a predicted schedule of generation for BMUs, and so more accurate PNs help to balance the system more effectively.”

In light of inaccurate PNs across the industry, the ESO has announced its intention to take additional steps to improve the accuracy of generators’ submissions.

It adds that the issue of inaccurate reporting is particularly prevalent with wind BMUs and therefore the new process will initially only apply to wind generators.

This will take the form of a two-step process which will last for an initial six month monitoring period.

The ESO’s open letter states that it will publish guidance in the coming weeks which sets out the overall process and level of accuracy that it expects to observe.

A three-week consultation will then take place followed by a six month monitoring period where the ESO will identify BMUs which are continually submitting inaccurate information.

By the end of the monitoring period, BMUs which are still submitting inadequate PNs will be given a formal notice and Ofgem will be notified.

Ofgem then has the powers to place unlimited fines on the generators found to be in breach of the new guidance.

In its inaugural Balancing Costs assessment, published earlier this month, the ESO predicts that total balancing costs could reach around £4.5 billion by the end of the decade.