Three energy firms to pay £10.5m over power cut failings

RWE Generation, Ørsted and UK Power Networks will pay into a redress fund run by energy watchdog Ofgem

Three energy companies have agreed to pay a total of £10.5 million over the power cut in August last year that left more than a million customers in the dark.

RWE Generation, Ørsted and UK Power Networks (UKPN) will pay into a redress fund run by energy watchdog Ofgem.

The regulator’s investigation into the power cuts on 9th August 2019 found the combined loss of two large generators as well as the smaller loss of generation at a local level triggered the disconnection and disruption, which left road and rail networks in chaos, knocked out traffic lights as well as affected some hospital services and airports.

Ofgem concluded two large power stations, Hornsea One Ltd (offshore wind farm co-owned by Ørsted) and Little Barford (gas-fired plant operated by RWE) did not remain connected after the lightning strike, which National Grid said was partly to blame.

The two companies have agreed to pay £4.5 million each into the regulator’s redress fund.

Ofgem added UKPN began reconnecting customers following the power cut without being asked to by the Electricity System Operator (ESO), which could have potentially jeopardised the recovery of the system.

The network operator recognised the technical breach, took action to prevent any future occurrence and agreed to pay £1.5 million into the fund.

Ofgem’s investigation has raised questions about how the ESO’s management of the system is carried out and will be conducting a review into the structure and governance of the ESO.

It will consider a number of options for how the system operator is structured, governed and managed and work closely with BEIS ahead of its position paper on system governance in 2020.

Jonathan Brearley, Executive Director at Ofgem said: “Consumers and businesses rely on generators and network companies to provide a secure and stable power supply. August 9th showed how much disruption and distress is caused to consumers across the UK when this does not happen. 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.

“As the energy market changes it is vitally important we future-proof the networks to ensure consumers continue to benefit from one of the most reliable electricity systems in the world.”

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