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Three electricity companies have agreed to pay a total of £10.5m in fines following an investigation by Britain’s energy regulator into a major blackout last August that disrupted more than 1m consumers and caused serious rail disruption.
Ofgem said it was also reviewing the arrangements for managing Britain’s electricity system, a role currently held by National Grid, following its probe into the incident.
Hornsea One, an offshore wind farm jointly owned by Denmark’s Orsted and Global Infrastructure Partners (GIP), plus German utility RWE have each agreed to pay £4.5m for their part in the power cut on August 9, which followed a lightning strike on the main electricity transmission system.
UK Power Networks, which owns local grid infrastructure in Britain, will pay £1.5m, Ofgem said on Friday.
Ofgem said it had not identified “any failures” by National Grid to meet its requirements in relation to responding to incidents of the kind witnessed last summer but the regulator said its investigations had “raised questions” about how “management of the system is carried out”.
It is starting a strategic review this month into the operation of the system, which is going to become ever more complex as the UK continues to shift away from large, centralised fossil fuel power stations towards more renewables, such as wind and solar, plus more local electricity generation schemes.
UK energy minister Kwasi Kwarteng had already questioned last year whether National Grid should retain its flagship role managing the electricity system.
The blackout last August was the worst in more than a decade. More than 370 rail services were cancelled. Newcastle Airport and two hospitals were also affected.
Ofgem said in its report that Hornsea One and a gas-fired power plant near Cambridge owned by RWE had agreed to pay the fines after failing to remain connected following the lightning strike. Both experienced technical issues almost simultaneously and were unable to continue providing power to the system.
A number of small power generators connected to local power grids — known in the energy industry as “distributed generation” — also disconnected and the cumulative loss of power was greater than the 1GW of reserve back-up power that was being held at the time by National Grid to account for any unexpected loss of generation. An automatic system was therefore triggered that cut off supply to 5 per cent of demand.
Ofgem said UK Power Networks’ fine related to the company reconnecting customers without being asked to by National Grid “which could have potentially jeopardised recovery of the system”.
Jonathan Brearley, who will next month take over as chief executive of Ofgem, said: “Consumers and businesses rely on generators and network companies to provide a secure and stable power supply. August 9 showed how much disruption and distress is caused to consumers across the UK when this does not happen.”
He added: “Our investigation has raised important questions about National Grid’s Electricity System Operator, which is why our review will look at the structure and governance of the company.” National Grid’s Electricity System Operator, which has responsibility for overseeing Britain’s energy system, is a legally separate company to National Grid but remains part of the wider publicly listed National Grid group.
A spokesperson for Hornsea One said the issue it experienced on August 9 was “quickly resolved” but added that “in recognition of our role in the outage, we have offered to make a voluntary contribution to Ofgem’s redress fund”.
Tom Glover, UK country chair at RWE, said: “RWE is proud of the reliability of its fleet in the UK. However, the events of 9 August, including the lightning storm, were particularly challenging for the whole power network to cope with.”
Barry Hatton, director of Asset Management for UK Power Networks, said: “Our premature action did not impact the recovery of the system on August 9.
“We have taken swift action to prevent any future reoccurrence and will make a voluntary contribution into Ofgem’s voluntary redress fund.”
The redress fund is spent on anything from projects that help to make homes more energy efficient to schemes providing advice to consumers to help them keep on top of their bills.
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