Ofgem will prevent plants from “artificially inflating” prices by threatening to turn off before then demanding more money to keep operating — in a side market known as the balancing mechanism. Traders could be fined up to 10% of regulated turnover for breaching the new rule, which comes into force on Oct. 26, it said Thursday.
“Ofgem will not tolerate electricity generators attempting to take advantage of the balancing mechanism system to make excessive profits,” Eleanor Warburton, Ofgem’s acting director for energy systems management and security, said in a statement.Ofgem’s new Inflexible Offers Licencing Condition will stop generators — particularly gas-fired power plants — from using their mechanics to their advantage.
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