Scottish Offshore Wind Farm Hit with GBP 33 Million Fine for Breaching Energy Market Rules

May 29, 2024, by Adnan Memija

Beatrice Offshore Windfarm Limited (BOWL), the operator of an 85-turbine wind farm off northeast Scotland, has agreed to make a payment of GBP 33.14 million (approximately EUR 39 million) after admitting it breached energy market rules.

*Beatrice offshore wind farm; Photo source: SSE Renewables*

BOWL, the operator of the 588 MW Beatrice offshore wind farm, admitted to breaching one of its licence conditions by charging excessive prices to reduce its generation output when this was required to keep the electricity grid balanced, thereby pushing up costs for consumers, said the UK energy regulator Ofgem.

After engaging with Ofgem, BOWL agreed to make the payment into Ofgem’s Redress Fund, which funds projects and schemes to support energy consumers, particularly those in vulnerable situations.

According to Ofgem, the scale of the payment has been determined with reference to both the significant consumer detriment and the financial gain to the licensee that Ofgem considers the breach is likely to have resulted in.

Ofgem’s review identified that BOWL’s prices did not properly reflect the financial benefits of reducing its output related to avoided payments that the company would otherwise have been required to make under the Government’s Contracts for Difference scheme.

BOWL’s approach to setting the part of its prices that was not related to subsidy payments carried a risk of the company recovering more revenue than was necessary to cover the costs incurred as a result of curtailing its output, said the energy regulator.

In addition, the operator of the wind farm failed to give meaningful consideration to its compliance with the requirements of the relevant licence condition or to document the limited consideration that it did give its compliance with these requirements, according to the press release.

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BOWL has told Ofgem that in its view the breach was inadvertent and at the time of submitting the bid prices, it had considered that it was compliant.

The operator has co-operated fully with Ofgem in its inquiries to resolve the issue quickly and fairly, said Ofgem.

Since Ofgem’s review, BOWL has not only agreed to make the redress payment but also committed to changing its bid pricing policy to prevent future breaches, according to the UK energy regulator.

The 588 MW offshore wind farm comprises 84 Siemens Gamesa’s SWT-7.0-154 wind turbines, the last of which was installed in May 2019.

The GBP 2.5 billion Beatrice project is owned by SSE Renewables (40 per cent), Red Rock Power (25 per cent), The Renewables Infrastructure Group (17.5 per cent), and Equitix (17.5 per cent).