SSE, the Perth-based renewable energy and electricity networks giant, has been fined £2.06 million by UK energy regulator Ofgem for failing to publish “in a timely manner, information about the future availability of its generation capacity.”
Ofgem said the disclosure breach related to capacity at the Fiddler’s Ferry power station near Warrington under SSE’s contract with National Grid — a move that was “likely to have had a significant effect” on forward wholesale electricity prices.
The regulator said SSE breached legal requirements on the publication of inside information because “it made the wrong decision” about whether it was in possession of inside information.
“The £2.06m fine, the first relating to the publication of inside information in energy markets in GB and the EU, sends a strong message to SSE, and other wholesale energy market participants, about the importance of fully complying with REMIT rules,” said Ofgem.
“Under the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT), ‘inside information’ is information which is likely to significantly affect the price of wholesale energy.
“Market participants must publish inside information in an ‘effective and timely’ manner …
“SSE’s delay in making a public announcement resulted in four days trading without the market knowing that more generation was likely to be available than previously thought.
“It is likely this led to some market participants paying more for wholesale electricity than they should have.
“The investigation found that whilst the company did consider whether it was in possession of inside information on 22 March 2016, it failed to reach the correct conclusion and publish on that date.
“In the course of its investigation Ofgem did not find evidence that SSE acted in bad faith …
“SSE fully co-operated with Ofgem’s investigation.
“By settling this investigation early, the company has qualified for a 30% discount for early settlement from the proposed approximate £2.6 million penalty.”
Ofgem CEO Jonathan Brearley said: “SSE’s failure to publish inside information in a timely and effective manner resulted in market participants trading for four working days under a false impression of supply availability in GB’s electricity market.
“This meant that market participants were likely to have paid higher prices than they needed to, and risked undermining confidence in the wholesale electricity market.
“This fine sends a strong message to market participants that they must be familiar with, and keep to, their obligations under REMIT rules or face enforcement action by Ofgem.”
Martin Pibworth, SSE’s Energy Director, said: “SSE takes its market disclosures extremely seriously and acted in good faith, publishing details of the ‘Black Start’ contract for Fiddlers Ferry power station once signed, in line with our interpretation of the REMIT regulations at the time.
“We subsequently understood that Ofgem’s interpretation required disclosure to the market at an earlier stage.
“We admit that our approach was not in line with this requirement.
“SSE did not benefit from disclosing only once the contract was signed and remains committed to clear and transparent rules for all market participants.
“We will be pressing regulatory authorities for additional guidance for market participants going forward.”