SSE fined £100k for overcharging to switch off

Energy regulator Ofgem found the ‘Big Six’ supplier demanded excessively high payments to switch off its hydropower stations when the grid could not cope with their electricity.

National Grid pays power stations the so-called “constraint payments” to reduce their output when there is not enough network capacity to transmit the electricity.

At times of high or low demand, the network operator asks generators to submit bids to increase or decrease their supply.

According to Ofgem, SSE submitted increased offers to National Grid to reduce generation at six of its Scottish hydroelectric power stations due to a flood risk at the dams last January.

“This led to National Grid paying more than it should have done to reduce generation from the stations to help balance Britain’s electricity supply,” the regulator said.

SSE has agreed to pay the £100,000 fine to Energy Action Scotland and said its failure to review its bid prices “in a timely manner after the flood risk had reduced” led to the overcharging.

Paul Smith, managing director, generation at SSE added: “We will look to improve our internal processes and engage more closely with the regulator in future on matters relating to cascade hydro pricing in order to ensure we are complying with our licence conditions at all times.”