Blog Post
Ofgem fines power generator InterGen £37.2 million
Matt Olney • Apr 16, 2020
Ofgem has fined power generation firm InterGen £37.2 million after an investigation found that it had sent misleading signals to National Grid in 2016.
Sent misleading signals for financial gain
Ofgem
said that it launched its investigation into InterGen in May 2017 after it received information from another market participant that it had observed suspicious activity in October and November of the previous year.
It was discovered that InterGen staff had manipulated the market during 4 days in the winter of 2016 by “deliberately sending misleading signals to the National Grid and claiming that some of its power stations would not be generating during the critical darkness peak evening when demand was at its highest”.
The Ofgem report states: ‘To boost profits even further, the company also deliberately sent misleading signals to National Grid about its power plants’ capabilities.’
‘At the time, the margins between electricity supply and demand were very tight, signalling a potential shortage. The misleading signals provided by InterGen staff made margins appear even tighter and pushed National Grid into spending money in the balancing mechanism that it did not actually need to.’
As a result of its actions, National Grid was duped into paying InterGen higher prices to generate electricity during the hours of highest demand. Through its manipulation of the market, InterGen made over £12 million.
A strong message
"InterGen misled National Grid system operator into paying millions more than it needed to for electricity generated by the company. This strong action sends a signal that Ofgem will not tolerate any form of market abuse that undermines the integrity of the wholesale market that can ultimately harm consumers," said Jonathan Brearley, chief executive of Ofgem.
Ofgem acknowledged that InterGen co-operated with its investigation and that it has since put in measures to prevent similar incidents from happening again.
“We deeply regret and sincerely apologise for the behaviour of former traders in these 2016 incidents. We take this matter incredibly seriously and have cooperated with Ofgem’s investigation. None of the traders involved in 2016 are still with the company,” said InterGen’s chief executive Jim Lightfoot.
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