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Ofgem Hands Out Fines Over August Power Cuts

UK’s energy watchdog Ofgem has singled out three energy companies that will be paying to the regulator’s redress fund of £10.5 million as penalty for the power cuts in large areas of Wales and England on 9 August 2019.

 

The said outage has left over a million customers without electricity and disrupted travel operations in the railways.

 

Results of the Ofgem investigation revealed the power cuts were caused by the combined failure of two large generators and small-scale local generation losses. The interim report has also associated independent power outages at Little Barford and Hornsea to a lightning strike.

 

The simultaneous incidents have affected homes, transportation, and businesses. Power was restored quickly, although disruption persisted to the next day.

 

Details on the investigation

 

Ofgem concluded that Hornsea One Ltd. and Little Barford failed to remain connected following the lighting strike. The said companies have agreed to voluntarily pay into the regulator’s redress fund of £4.5 million each. Hornsea is co-owned by Orsted while RWE operates Little Barford.

 

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The regulator has also looked into the railway situation, coordinating with the Office of Rail and Road regarding the outage that affected the trains and distressed many commuters. The office published its findings and revealed that some trains had software flaws, causing extended delays to train passengers.

 

Ofgem determined that local network operators were able to respond to the power loss, disconnecting and subsequently reconnecting consumers as standard practice. However, UK Power Networks (UKPN) reconnected its consumers without a signal from the ESO, potentially jeopardizing system recovery.

 

While it made no impact on the August power cuts, the UKPN was aware of the technical breach and took swift action to block possible reoccurrence in the future. The company has also agreed to pay £1.5 million to the regulator’s voluntary redress fund.

 

All parties involved in the incident have cooperated fully throughout the investigation conducted by Ofgem.

 

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Reviewing ESO’s structure

 

The regulator has expressed plans to review the governance and structure of the ESO after the power cuts have raised concern among the public and stakeholders in the energy industry. Ofgem will look into the way the National Grid’s Electricity System Operator (ESO) is structured, governed, and controlled, and will collaborate with BEIS before the publication of its study on system governance this 2020.

 

Ofgem has recommended actions to develop the UK’s electrical system as one of the most reliable in the world, especially since more small-scale generation connects to the system.
Jonathan Brearley, Ofgem executive director, indicated the expectations of businesses and consumers as a basis for upholding fines for companies that failed to give the energy generation they are paid to provide. Network companies must deliver power supply that is reliable and secure, but this did not happen in the August 2019 incident.

 

Brearly remarked on the importance of futureproofing networks. He states that it will benefit consumers to have a reliable electricity system that adapts to energy market changes. The regulator’s upcoming review on the ESO is one of the actions Ofgem has undertaken to protect the future of the UK’s power systems.

 

The incident

 

The power cut that ensued last 9 August 2019 happened around 17:00 BST, which triggered blackouts across a large area of England and Wales. Thousands of households lost power, rail commuters were stranded, and traffic lights on the street ceased to work.

 

By 17:40 BST, power was restored, but the rail network disruption persisted over the weekend.

 

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UKPN restored power to customers early, although it did not affect the loss of power or outcome thereof. However, it is a technical breach for potentially disturbing the recovery of the system.

The fiasco at the offshore wind farm owned by Hornsea One Ltd. and the RWE-operated gas power station of Little Barford were unforeseen independent events contributing to the power cut but were quickly resolved.

 

An estimated 150MW of distributed generation were also found to go offline at around the same time. NGESO turned on its back-up generators to counter the shortfall of the two significant generators to balance the system, but it failed to cover all areas of outage. It resulted in the immediate disconnection of some households from the grid to prevent the escalation of the disruption.

 

Distribution Network Operators were able to reconnect all consumers within 45 minutes following the lightning strike.