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Scottish offshore wind farm fined £33 million for breaching energy market rules

Beatrice Offshore Windfarm Limited (BOWL) has agreed to a redress payment of £33.14 million after acknowledging a breach of its licence conditions. The breach involved overcharging to reduce its generation output, which increased costs for consumers.

The energy regulator Ofgem announced that BOWL will make this payment after admitting to breaking energy market rules. An Ofgem review found that BOWL, which operates an 84-turbine wind farm off the northeast coast of Scotland, violated the Transmission Constraint Licence Condition (Condition 20A of the Electricity Generation Standard Licence Conditions).

While BOWL maintained that the breach was unintentional, it has committed to revising its bid pricing policy to prevent future infractions. The company has fully cooperated with Ofgem throughout the investigation.

Inadequate pricing

Ofgem's review found that BOWL's pricing did not adequately reflect the financial benefits of reducing output under the Government’s Contracts for Difference scheme. Additionally, parts of BOWL's pricing strategy risked generating excessive revenue beyond the costs incurred from curtailing output. BOWL also failed to properly consider or document its compliance with the relevant licence condition.

BOWL's payment will go into Ofgem's Redress Fund, which supports energy consumers, particularly those in vulnerable situations. The payment amount reflects the significant consumer detriment and the financial gains from the breach.

Fifth action against electricity generation companies

Ofgem announced this redress following a year in which it secured £77.2 million from various companies into the Redress Fund. This case marks the fifth action Ofgem has taken against electricity generation companies since early 2023 for similar breaches, with previous settlements including payments from Drax Pumped Storage Limited (£6.12 million), SSE Generation Limited (£9.78 million), EP SHB Limited (£23.63 million), and Dorenell Windfarm Limited (£5.53 million).

Given BOWL's acceptance of the breach, their cooperation, and their commitment to policy changes, Ofgem has concluded its compliance review without resorting to formal enforcement action under the Electricity Act 1989.


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