Drax fined £6.1m for overcharging operators

ENERGY giant Drax has been fined £6.1m for overcharging grid operators.

The company agreed to pay the sum after regulator Ofgem accused it of charging “excessive” prices for changing the output of the Cruachan pumped storage power station in Argyll and Bute, Scotland.

Through the so-called balancing mechanism, Cruachan is one of several facilities the National Grid ESO (electricity system operator) calls on to fine-tune supply and demand.

This is done through a continuous auction process, where businesses submit offers to the grid indicating their price for consuming more or generating less electricity.

In this case, Ofgem said Drax had “inadvertently” breached the terms of its electricity generation licence by demanding payments that were too high between January 2019 and July 2022.

The firm had been asked to reduce generation at Cruachan at a time when parts of the grid were congested and network operators were trying to free up capacity.

Drax fully cooperated with Ofgem after being contacted about the issue and had proactively offered to pay a fine, the regulator added.

Cathryn Scott, Ofgem’s director of enforcement, said: “This enforcement action sends a strong signal to all generators.”

The fine will go into a redress fund to support vulnerable consumers with their energy bills.

A Drax spokesman said: “Drax takes its responsibilities under the terms of its generation licence very seriously and co-operated fully with Ofgem in order to resolve this issue.” He added that the firm had put measures in place to prevent this from happening again.