Notice of proposed penalty - SSE Generation Limited

Penalty notice

Publication date


Industry sector

Generation and Wholesale Market

Licence type

Electricity Generation Licence

This document gives notice of our intention to impose a penalty on SSE Generation Limited ("SSE") in relation to a breach of its obligations under the electricity generation licence (Standard Licence Condition 20A, known as the Transmission Constraint Licence Condition, or “TCLC”).

Our investigation was opened in October 2021, and concerns the bid prices submitted by SSE in the Balancing Mechanism for Foyers pumped storage power station. In May 2020 SSE took the decision to make the bid prices it charged the electricity system operator to reduce Foyers’ output significantly more expensive – including in periods of transmission constraint. We have concluded that the bids submitted resulted in SSE obtaining a profit which was significantly greater than that which it would have obtained absent the transmission constraint, and so was in breach of the TCLC.

As a consequence, Ofgem proposes to require the company to pay £9.78 million into the Energy Redress Fund. Any written representations or objections to Ofgem’s proposal must be received no later than 27 June 2023 and will be considered prior to Ofgem reaching its final decision on whether to impose a penalty on SSE.