Ofgem and BEIS find DNO’s provided ‘unacceptable service’ during Storm Arwen

Both Ofgem and the Department of Business, Energy and Industrial Strategy (BEIS) have set out a number of recommendations for network operators, as their reviews find service was “unacceptable” during Storm Arwen.

Storm Arwen hit the UK in November 2021, and left nearly a million households without power, predominantly in North East England and Scotland. Of these, nearly 4,000 were without power for over a week.

In response, both the government and regulators have undertaken separate, six month reviews, to establish what went wrong and determine ways to improve resilience going forwards.

“Distribution network companies faced challenging conditions in the aftermath of Storm Arwen, and I pay tribute to the many colleagues in those companies who supported customers and worked to get them back on power as quickly as possible,” said Jonathan Brearley, chief executive of Ofgem.

“However, it was unacceptable that nearly 4,000 homes in parts of England and Scotland were off power for over a week, often without accurate information as to when power would be restored.”

DNO’s must ‘work smarter’ as extreme weather events become more common

Ofgem’s review’s main findings include that some customers were off power for an unacceptable amount of time, received poor communication from their Distribution Network Operator (DNO) and compensation payments took too long.

Emergency plans initiated when the storm hit were not sufficient to deal with the scale of the damage created by Storm Arwen.

Northern Powergrid failed to directly contact vulnerable customers who were enrolled on it’s Priority Services Register (PSR), which should have been carried out as part of its winter preparedness campaign.

The DNO has also accepted that the performance of its call centres fell below the expected standards, which could be a potential breach of licence condition, SLC 8.3(b) & (c), according to Ofgem.

“The extreme nature of the event meant we learned some difficult lessons,” said Phil Jones, chief executive of Northern Powergrid in response to both Ofgem and BEIS’s reports.

“It highlighted some limitations in our systems and showed us things we can do to be able to provide a stronger response to more extreme storms. We are committed to doing those things to make the communities that we serve more resilient to extreme weather events.”

The company will pay over £7.5 million in voluntary redress payments, helping to fund charitable and not-for-profit activities that will help improve resilience in the area. Scottish and Southern Electricity Networks (SSEN) and Energy North West (ENWL) have also made additional voluntary payments, of £2.3 million and £290,000 respectively.

This is in addition to the nearly £30 million in direct compensation paid by the three network operators to affected customers after the storm. The cap of £700 for compensation was lifted during Storm Arwen.

Additionally, Ofgem’s review found that there was limited remote monitoring on the low voltage networks, which hindered understanding of the full scale and complexity of faults. This impacted the resources initially deployed to make repairs, restore power and support customers.

The bulk of the damage caused by Storm Arwen was due to strong winds or trees or branches falling onto power lines. The regulator additionally found some correlation between the poles that were damaged and their age, but more investigation is required.

Customers had to endure long wait times and poor and sometimes inaccurate communications with network operators during the storm, as well as long delays in receiving compensation. The review found that 28% of customers were given a restoration time that was not within 24 hours of their actual restoration time, while some stated that the support available to them was not made clear.

“Network companies need to do better, not just to prevent power disruptions, but to ensure that when power is off, they work smarter to get people back on power quicker, and keep customers informed with accurate and timely information. This is the very least customers should be able to expect,” said Brearley.

“The frequency of extreme weather events is only set to increase so it is really important that industry, and those involved more widely, learn from Storm Arwen to better respond in future.”

Ofgem has provided a number of key recommendations on the back of the review’s findings. First, DNOs should submit their winter preparedness plans to the regulator, to assure it that it has taken the necessary steps to support customers.

Next, network operators should stress test their websites and call centres to ensure they can manage the increased demand during a severe weather event. They should also develop more robust mechanisms for providing compensation payments at scale, to ensure this can be done in a timely and accurate manner.

The regulator is to review the Guaranteed Standard of Performance for severe weather to identify amendments required to reflect the impact of extended power cuts. In the meantime however, Ofgem recommends that DNOs voluntarily the cap for future storms as they did during Storm Arwen.

Network infrastructure and guidance – including vegetation management and overhead line designs – should be reviewed to increase resilience.

Finally, a standard-based approach to organisational resilience should be considered by the Energy Emergencies Executive Committee (E3C) to improve the speed of customer restoration during severe weather events.

Customers ‘badly let down’ by network companies

In addition to Ofgem’s review, E3C has today published a report into how network operators managed Storm Arwen, commissioned by the secretary of state for BEIS.

“Storm Arwen was one of the most extreme weather events in decades, and I’m grateful to all those engineers, Armed Forces personnel and volunteers who worked night and day to get people reconnected to power,” said business and energy secretary Kwasi Kwarteng.

“However, it’s clear that thousands of customers were badly let down by electricity network companies, which is why I launched this review to identify and address any failings.

“This action plan will ensure better preparedness for future storms, boosting the security of our electricity system and protecting families.”

Like the regulator’s report, it finds the it was unacceptable for thousands of homes to be left without power for so long, and sets out a number of recommendations for DNOs going forwards.

These include developing a new ‘outcomes-focused physical resilience standard’ given existing network standards failed to provide adequate resilience during Storm Arwen.

BEIS has ordered each DNO to review their severe weather escalation plans, to make sure that all relevant factors that could impact the scale of the situation are considered. Meanwhile the government will update industry best practice, to ensure operators can quickly identify faults and assess the extent of the demand earlier in a storm, including exploring whether smart meter data and technology could help with this.

As one of the biggest issues faced by customers during the storm was poor communication services, the government has ordered DNOs to ensure systems are adequate to meet demand and to introduce both phone systems and websites capable of managing increased traffic during a storm. This should include considering any additional resource that might be required.

Finally, there will be changes to compensation payment systems to allow it to be paid out faster. Nearly 90% of those affected by Storm Arwen had received compensation by 24 January 2022, according to BEIS, but DNOs should still work to develop more robust payment mechanisms.

The Energy Networks Association is set to lead on developing more publicity for the compensation available to customers in the event of a power cut, while Ofgem is commissioning a review into the compensation payment structure.

“Storm Arwen caused catastrophic damage and disruption to customers and we welcome today’s findings. It’s important customers have trust in their network operators and are supported during severe weather events,” said David Smith, chief executive of Energy Networks Association.

“As well as implementing the recommendations set out by government and the regulator and enhancing customer service, network operators have also identified areas which will need increased investment to provide better energy security and service for customers in the long term. This is particularly important as severe weather events become more frequent. The six electricity distribution network operators have submitted these details in their business plans for the next five years and Ofgem is due to make its initial determination in the coming weeks.”

Ofgem’s full report can be read here, and the E3C report, commissioned by BEIS, can be read here.