The energy watchdog Ofgem has kicked off investigations into two energy companies, EP SHB and SSE Generation.
The regulator is trying to determine whether the energy providers overcharged (to coin a phrase) the national grid in an attempt to reduce the amount of energy they provide to the grid.
Ofgem’s investigations will centre on whether the bid prices the two companies submitted were excessively expensive, including when taking into account both the opportunity costs and avoided costs associated with reductions in generation.
Between October 2019 and May 2021, EP SHB Limited, the owner and operator of South Humber Bank combined cycle gas turbine power station, regularly submitted bid prices of £0/Mwh [megawatt hour], a level that was particularly expensive for a gas-fired power station, according to Ofgem.
SSE Generation Limited, the owner and operator of Foyers pumped storage power station, is under investigation for the bid prices it submitted in May 2020 for Foyers. These prices were significantly more expensive than those it had typically submitted previously, including frequently setting prices to reduce generation as low as -£60/Mwh.