The House of Commons energy and climate change select committee has said it will write to the energy regulator Ofgem to ask it to examine “potential abuses of the system”, in light of the prices paid by National Grid following its supply warning on 4 November.
A Notice of Insufficient Supply Margin (NISM) is a signal sent by National Grid to the market that it requires more generation to safeguard the buffer between supply and demand.
In an evidence session on Tuesday 24 November, the committee expressed concern that one generator in particular, Calon Energy, had reduced its power following the NISM on 4 November, but had subsequently been paid prices of up to £2,500/MWh to help meet peak demand. The extra cost of this energy is ultimately borne by end users.
Committee chair Angus MacNeil told the Telegraph: “It is crucial that Ofgem establish whether major electricity generators are manipulating power prices during periods of insufficient supply.”