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Blackout investigation: Power firms fined as Ofgem ‘accelerates’ ESO review

Image: Getty.

Image: Getty.

Power companies are to be fined £10.5 million and an already planned review into the electricity system operator (ESO) accelerated following Ofgem’s investigation into the nationwide blackout on 9 August 2019.

An investigation launched by the regulator in the wake of the blackout – caused by a significant loss of generation at two generators in particular and its resultant effects on the system – has found that both Orsted’s Hornsea One offshore wind farm and RWE’s Little Barford CCGT failed to remain connected to the system following a lightning strike.

As a result, both companies have agreed to make a voluntary payment of £4.5 million to Ofgem’s redress fund.

The regulator also concluded that UK Power Networks began reconnecting customers to the grid – distribution network operators were instructed to disconnect load to maintain system integrity – before being cleared to do so.

While Ofgem has said this had no impact on the incident itself, the regulator said it could have jeopardised the recovery of the system and, as a result, UKPN has been fined £1.5 million for a technical breach.

However, Ofgem’s investigation also “raised questions” about how National Grid ESO’s management of the system was carried out, the regulator said, noting the importance for the ESO in “adapting to the complex and changing world it operates in”.

Ofgem said it would now accelerate its review of the ESO’s structure and governance, pledging to work closely with the Department of Business, Energy and Industrial Strategy ahead of a position paper on system governance due out later this year.

Jonathan Brearley, executive director at Ofgem, said the blackout event showed the scale of disruption and distress caused to consumers when power supplies are impeded.

“That is why it is right that companies that were unable to keep generating have paid into our consumer redress fund.

“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,” he said.

More to follow…


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