Drax to pay £6.1m fine for breaching licence

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Ofgem said on Friday that electricity firm Drax has agreed to pay a £6.1m fine for breaching its energy generation licence by charging National Grid excessive prices to reduce power generation.

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The energy regulator said that Drax had secured excessive payments between 1 January 2019 and 31 July 2022, by submitting excessively expensive bids to turn down its generation in the Balancing Mechanism (BM).

Generators receive payments under the BM to increase or reduce power to the network at times of grid constraint.

The regulator said: "Ofgem considers that Drax obtained the payments by submitting excessively expensive bid prices to curtail its generation during times of transmission constraint, with the effect of increasing balancing costs which are ultimately borne by consumers."

Drax has agreed to pay the fine into a voluntary energy redress fund, having admitted that it inadvertently breached a condition of its generation licence.