UK energy regulator says SSE Generation to pay $12.2 million for licence breach

(Reuters) -Britain's energy regulator Ofgem said on Tuesday SSE Generation will pay 9.8 million pounds ($12.2 million) for securing excessive payments from the National Grid Electricity System Operator (ESO) for reducing output at Foyers power station.

The decision followed months of investigation, after SSE changed its bid pricing for balancing services at the Foyers pumped storage power station in northern Scotland, Ofgem said.

The power plant participates in the UK balancing market, run by National Grid ESO, to help increase and decrease electricity production to ensure a stable power grid operation.

Ofgem had started the investigation in October 2021.

The watchdog said it had not seen any evidence which suggested that the breach was deliberate but argued it should have been clear to SSE that a change could breach the licensing conditions.

"We aim to comply with regulations at all times and believed we were doing so in this case," an SSE spokesperson said.

SSE co-operated with the investigation and expressed its willingness to settle the case, and has also committed to a new pricing methodology to properly reflect its costs and benefits of reducing generation at Foyers, Ofgem said.

"Following the investigation, we are updating our relevant procedures accordingly," SSE's spokesperson added.

Any objections to the regulator's proposal must be filed by June 27, Ofgem said.

($1 = 0.8034 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru and Nora Buli in Oslo; Editing by Dhanya Ann Thoppil, Louise Heavens and David Evans)