UK Wind Farm to Pay $42 Million for Breaching Market Rules

The operator of a large offshore wind farm in Scotland will pay $42.4 million (£33.14 million) to the UK’s energy market regulator for breaching rules after overcharging for having to reduce wind generation when required.

Electricity generator Beatrice Offshore Windfarm Limited (BOWL) has accepted that it breached one of its license conditions and will make a redress payment of $42.4 million (£33.14 million) as a result, the regulator Ofgem said in a statement on Tuesday.

An Ofgem review found that BOWL had charged “excessive prices to reduce its generation output when this was required to keep the electricity grid balanced, thereby pushing up costs for consumers,” the regulator said.

“Whilst BOWL now accepts Ofgem’s position that its approach was not compliant with the relevant license condition, BOWL has told Ofgem that in its view the breach was inadvertent and at the time of submitting the bid prices, it had considered that it was compliant,” Ofgem added.

The operator of the wind farm has also committed to making changes to its bid pricing policy to ensure a breach does not happen again.

Since the start of 2023, Ofgem has now fined five wind farm operators for breaching market rules, the regulator said.

Earlier this year, a Bloomberg investigation found that some wind farm operators in the UK have been overestimating forecasts of the power they would generate, leading to millions of British pounds added to consumer energy bills each year.

Reporters Todd Gillespie and Gavin Finch led a Bloomberg investigation which found that some wind farm operators have been overstating how much electricity they would produce. This has been raising the payments they receive to turn off power output if too much wind generation on very windy days risks overloading the grid.

On such occasions, the grid operator typically pays some wind power operators to generate less electricity—payments that add to energy bills.

By Tsvetana Paraskova for Oilprice.com

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