In the Californian energy crisis of 2000-01, traders at Enron used strategies nicknamed Death Star and Fat Boy to manipulate the state’s crumbling electricity infrastructure for profit.

To this roll call of scams, is it now time to add another – the Highland Fling? The allegation is that power stations in Scotland were shut down to create artificial constraints on supply, only to be reopened, providing an opportunity for a windfall profit.

There will be some suspicion that Ofgem’s decision to investigate the allegations is another attempt to prove that it takes consumer concerns about lack of competition in the British power market seriously.

The regulator has already grudgingly launched two inquiries into energy competition and networks this year, in spite of its conviction that everything is working pretty well. Nevertheless, the detail of the allegations do suggest it is worth having a look.

It will be months, perhaps years, before we get a verdict. But one thing is already clear – the cost of dealing with constraints on the UK’s electricity supply network are set to grow.

Britain’s energy infrastructure needs huge investment to accommodate new offshore wind farms and nuclear reactors – all of which will need to be hooked up to areas of demand – as well as an increase in microgeneration at a local level.

At the same time, more ageing power stations will come offline, either for maintenance or as they are retired, raising the prospect of serious supply disruptions. Just as in California, this will also present opportunities for abuse.

david.wighton@thetimes.co.uk

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