As it outlined efforts to try and crack down on the practice, the British energy regulator accused power plant owners of trying to trick the system for excessive profits.
In an examination, it was discovered that some generators had withheld supplies in order to sell them for more money on the backup market, driving up prices for customers during the height of the energy crisis, Ofgem said on Thursday.
It started the investigation after network operator National Grid spent £60 million on one day in November 2021 to maintain supply and demand balance through the so-called balancing market, setting records for expenses.
When demand is at its peak, according to Ofgem, these expenses during the winter of 2021–22 reached £1.5 billion, more than quadruple the average for the previous three winters.
The watchdog announced that it would take strict action against “various behaviors it had identified among some generators, who have been trying to gain excessive financial benefit at the expense of consumers.”
Eleanor Warburton, acting director for energy systems management and security at Ofgem, stated that the organization is recommending a new license condition to “ensure electricity generators do not take advantage of existing rules to make excessive profits.”
According to Ofgem, the new license requirement, which will limit generators’ capacity to make a profit and involve monetary fines for violations, might go into effect in time for the next winter.
The intervention follows last week’s increased pressure from UK chancellor Jeremy Hunt on regulators, particularly Ofgem, to do more to keep consumer bills down.
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