Beatrice Offshore Windfarm (BOWL) has reached an agreement to pay just over £33 million after acknowledging a breach of energy market regulations at the 588-megawatt Beatrice offshore wind farm located off the north-east coast of Scotland.
The operator, BOWL, which manages an 84-turbine project, admitted to violating a licence condition, known as the Transmission Constraint Licence Condition, by imposing excessive charges to curtail its generation output when necessary for grid balancing. This action led to increased costs for consumers, according to Ofgem.
Following discussions with Ofgem, BOWL agreed to contribute the payment to Ofgem's Redress Fund, which supports energy consumers, particularly those in vulnerable circumstances.
SSE Renewables owns 40% of the operator, with Red Rock Power, TRIG, and Equitix each holding stakes of 25%, 17.5%, and 17.5% respectively. A spokesperson for BOWL stated that while the breach was unintentional, the company acknowledges its responsibility and has taken corrective measures.
“BOWL will make a payment to the Ofgem consumer redress fund, has reviewed its bid pricing policy and fully cooperated with Ofgem throughout to conclude this process,” the spokesperson affirmed.
The regulator, Ofgem, determined the scale of the payment by considering both the impact on consumers and the financial benefit gained by the licensee due to the breach.
Ofgem's review highlighted that BOWL's pricing did not adequately reflect the financial advantages of reducing its output, particularly in relation to payments that would have been due under the Government's Contracts for Difference scheme.
Additionally, Ofgem noted that BOWL's pricing approach posed a risk of over-recovery of revenue, surpassing the necessary costs incurred from curtailing output.
Furthermore, the regulator found that BOWL did not adequately consider compliance with licence conditions, nor did it document its considerations appropriately.
BOWL maintained that the breach was unintentional and that it believed it was compliant at the time of bid submission. The company has since collaborated with Ofgem to address the issue and has committed to revising its bid pricing policy to prevent similar breaches in the future.
Following its review, Ofgem concluded the compliance review without initiating formal enforcement action under the Electricity Act 1989.
