Companies face market manipulation review for alleged inflation of compensation payments.

Wind farm owners are being investigated by the energy watchdog for alleged market manipulation after they were accused of overcharging consumers by £100m. The Telegraph has the story.

Ofgem is to examine claims that renewable energy companies artificially inflated compensation payments given to them for switching off their turbines on windy days when the grid did not need extra capacity.

It has been handed a dossier gathered by analysts at the Renewable Energy Foundation (REF), which suggests wind farm companies could be boosting the price of “virtual energy” they never actually generated.

An Ofgem spokesman confirmed that the claims had been received and an investigation has begun into whether any rules were broken.

John Constable, director of REF, a charity that has frequently highlighted excessive payments to wind farms, said: “Our evidence suggests that multiple wind farm operators have been charging over the odds to reduce their output on windy days, generating no energy but costing consumers a fortune.

“We estimate it added £100m to overall consumer bills in 2023 alone.”

REF claims that operators overcharged for constraint payments, the cash given to electricity generators to switch off wind farms and other assets when the national grid risks being overloaded.

On windy days, the output from Scotland’s turbines surges to an unmanageable level because there are too few national grid links to carry their power to England’s cities.

When this happens, the National Grid Electricity System Operator (NGESO) tells wind farms to “constrain” their output – meaning they must switch off, and therefore earn less money from the subsidy system that underpins renewable generation.

The farms are then allowed to claim compensation for this lost income, with the costs added to consumer bills. However, the complexity of the system has given rise to multiple opportunities for overclaiming.

Ofgem is already investigating a separate allegation of wind farm overcharging that is estimated to have cost bill payers £51m since 2018.

Earlier this month, the regulator ordered Dorenell Wind Farm in northern Scotland, which is owned by EDF Renewables, to repay £5.5m.

Read the full story here.