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UK Windfarm Fined for Breaching Energy Market Rules

A windfarm on the land owned by a disgraced former City financier and conservative party donor has been slapped with a fine for overcharging customers.

Energy watchdog Ofgem today said that it has served the electricity generator at Dorenell Windfarm in Scotland with a £5.53m fine for "a breach of energy market rules."

The body said that the prices set by Dorenell Windfarm Limited (DWL) "did not properly reflect the financial benefits" of reducing its output related to avoided payments that otherwise would have been required by the Government's Contracts for Difference scheme.

This, Ofgem said, led it to recover more than was necessary for reducing its output, necessary due to the physical limits of the transmission system.

Market rules prohibit generators from charging excessive prices in such circumstances, helping to keep consumer bills down.?? 

As a result, Ofgem deemed that DWL charged excessive prices to reduce output where this was required to keep the system balanced and the breach pushed up costs for consumers.

Dorenell Wind Farm is located on the Cabrach Estate in Scotland's Moray region.

The estate is owned by Dr Christopher Moran, a former City insurer with a net worth of some £25m who in 1982, became the first person to be thrown out of Lloyd's of London for "discreditable" business acts.

In 2018, The Times revealed Moran had been renting Chelsea apartments in his portfolio to sex workers.

He has also given over £290,000 to the conservative party in personal and company donations and led the £30m sale of the party's former Smith Square headquarters.

French energy company EDF owns a 51 percent stake in the Dorenell Wind Farm project, with the London and Edinburgh-based asset manager Dalmore Capital owning the remaining 49 percent.

Both pay rent for the land to Moran, who has been described in local Scottish media as a "wind farm vulture" and has since been earning an estimated £1m in rent per year from the site. Related: Could This Unknown Company Help Solve Europe's Energy Crisis?

Director of enforcement for Ofgem Cathryn Scott described it as "another win for customers". ? 

"This company has accepted its error and has agreed to make a significant payment to put it right," she said.

"Customers - particularly those in vulnerable situations - will rightly benefit from over £5m as a direct result and we hope this sends a clear message that licence breaches will simply not be tolerated."? 

A spokesperson for Dorenell Windfarm Limited (DWL) said:

"Dorenell Windfarm Limited takes compliance seriously and aims to comply with regulations at all times. DWL reviews its practices regularly and adapts as necessary.

"At all times throughout this review DWL has engaged actively with Ofgem and cooperated fully to resolve the issue.

"DWL accepts it made an unintentional breach of the Transmission Constraint Licence Condition (TCLC). As a result, DWL has changed its bid pricing policy to avoid any future breaches."

By CityAM

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