SSE under Ofgem rules over lower output

This is when operators are paid to drop output if there is no enough network capacity to take power out of an area where generation outstrips demand.

The power system operator takes steps to control flows across the network to increase and decrease the amount of electricity produced by different generators.

But there are risks that generators can exploit their position by increasing prices to reduce output, and Ofgem puts rules in place to prevent this.

SSE made the bid prices it charged to the electricity system operator to lower output significantly more expensive, including in periods of transmission constraints.

Although there was no evidence to suggest the move was deliberate, Ofgem said that SSE breached the rules that were in place.

SSE has now pledged to create a new pricing system designed to accurately reflect the costs and benefits of reducing its production at Foyers.

The government said it would consider any written representations or objections before reaching its final decision on whether to impose a penalty on SSE.

Ofgem has established a fund to distribute payments from rule-breaking energy companies to charitable groups. The Energy Saving Trust manages it.

The funds can cover everything from making a home more energy-efficient to providing advice that helps struggling consumers keep on top of their bills.

We aim to comply with regulations at all times and believed we were doing so in this case, a spokesman for SSE said.