SSE fined GBP 2.06 million for late inside information (Ofgem, 2020)
Ofgem found that on 22 March 2016 SSE Generation held inside information, that non-binding heads of terms for an ancillary services contract and a decision to keep 1,455 MW of transmission entry capacity meant three Fiddler's Ferry units would likely stay open, and that it did not disclose it until 30 March. The penalty was GBP 2,060,000 after a settlement reduction from GBP 2,627,000.
On this page
The decision
- Authority
- Ofgem (OFGEM), Great Britain
- Published
- 3 September 2020
- Participants
- SSE Generation Limited
- Commodity
- Electricity
- Market
- GB forward wholesale electricity market
- Conduct period
- 22 to 30 March 2016
- REMIT
- Article 4 (Disclosure of inside information)
- Type of conduct
- Late disclosure of inside information
- Penalty
- GBP 2,060,000, after an early settlement reduction from GBP 2,627,000
- Status
- Final (settled)
What Ofgem found
The final notice, dated 24 August 2020 and published on 3 September 2020, holds that SSE Generation Limited breached Article 4(1) of REMIT on 22 March 2016 by failing to disclose inside information to the wholesale energy market in an effective and timely manner. The notice sets out the sequence. On 3 February 2016 the company announced that it was consulting on ending commercial operations at three of the four units at Fiddler's Ferry coal-fired power station and expected them to close by 1 April 2016. On 22 March 2016 it signed non-binding heads of terms for a one-year contract to provide ancillary services to National Grid from 1 April 2016, covering any one of the three units, and decided to retain transmission entry capacity of 1,455 MW, equal to the three units, for 2016/17. On 30 March 2016 it signed the contract and announced both points, plus its intention to enter all or part of the capacity into any 2017/18 Capacity Market auction.
The Authority found that the information of 22 March was of a precise nature, had not been made public, and would if published have been likely to significantly affect prices. It stated the inside information as: non-binding heads of terms signed and TEC retained, so the three units would, subject to the successful conclusion of negotiations, likely stay open.
What the decision turned on
Ofgem gave three reasons for price significance. The information concerned a significant volume of potential capacity, 1,455 MW, previously indicated as likely unavailable; the notice puts the three units at approximately 3% of peak GB electricity demand. Forecast margins for winter 2016 were known to be very tight in March 2016, so the extra capacity would be expected to put downward pressure on prices. And a reasonable investor who knew it would have been likely to use it in trading decisions.
The notice treats the outcome's uncertainty as no bar: the information was precise because it indicated circumstances that may reasonably be expected to come into existence. Ofgem noted that the company failed to recognise the importance of announcing on 22 March even though a degree of uncertainty remained as to the final outcome. Ofgem's press release adds that the company did consider whether it held inside information that day but reached the wrong conclusion, and that Ofgem found no evidence of bad faith.
The penalty
The Authority determined a penalty of GBP 2,627,000, calculated under the six-step process in its REMIT Penalties Statement of 23 June 2015 and taking account of the company's representations. It recognised the novelty of the case and the lack of published guidance at the time of the breach. Because SSE admitted the breach and settled in the early window, the penalty was reduced to GBP 2,060,000, payable within 14 days of service. A warning notice and decision notice preceded the final notice, and a referral of the decision notice to the Upper Tribunal would make the final notice cease to have effect.
For a surveillance function
The decision applies the inside information test to a negotiation before it is concluded, and finds that a decision to keep capacity, together with signed non-binding terms, was enough to require disclosure. A generator's disclosure process therefore has to assess information at each stage of a transaction, not only once the contract is final.
Sources
- Ofgem, Final notice regarding the imposition of a financial penalty on SSE Generation Limited, 24 August 2020 (Decision)
- Ofgem, Ofgem fines SSE GBP 2.06 million for failing to publish inside information, 3 September 2020 (Press release)
- ACER, overview of REMIT sanction decisions (ACER register)
Sources read on 27 October 2026. This page restates what the authority published and adds no finding of its own. A decision under appeal is not final, and its status may have changed since: check the source before relying on it.