The UK’s energy regulator Ofgem has opened an investigation into whether Moray Offshore Windfarm (East) Ltd was charging excessive prices for reducing power output on the request of the National Energy System Operator (NESO) as part of the grid-balancing mechanism.
The Moray East offshore wind farm, owned by a consortium comprising Ocean Winds, DGL (Inpex, KEPCO, and Mitsubishi) and Equitix, produced first power in June 2021 and was fully operational in April 2022.
In September 2021, the 900 MW offshore wind farm began operating in the balancing mechanism (BM), which NESO uses to increase and decrease the amount of electricity produced by different generators to manage transmission constraints.
To prevent electricity producers from charging NESO excessive prices to reduce their output, they are obliged to comply with the Transmission Constraint Licence Condition (TCLC), or condition 20A of the Electricity Generation Standard Licence Conditions, which Ofgem is now looking into in the case of Moray East.
According to an update published by Ofgem on 9 April, the bid prices of Moray Offshore Windfarm (East) since it began operating in the BM “appear expensive relative to the expected marginal cost of reducing generation for this generator” .
The investigation, which is now underway, will assess whether these bid prices were excessive during periods of constraint.
Ofgem also pointed out that the opening of the investigation does not imply that the regulator made any findings about non-compliance by Moray Offshore Windfarm (East) Ltd.