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Ofgem levies massive fine against energy firms involved in August power cut

Energy watchdog Ofgem has said it will levy fines totalling £10.5m on three energy firms after a massive power outage on 9 August 2019 left thousands of homes and businesses without electricity.

Ofgem found that over one million customers on the UK’s East Coast were affected by the power cut, which also caused severe travel disruption for many people.

The outage occurred after a lightning strike, which took the operations of power stations Hornsea One, co-owned by Orsted, and Little Barford, operated by RWE, offline.

Ofgem said each of the companies had agreed to make a voluntary payment of £4.5m into its redress fund.

UK Power Networks (UKPN) was also found to have begun connecting customers back to the grid without word from the National Grid Electricity System Operator (ESO) that it was safe to do so.

This could have jeopardised the recovery of the system, Ofgem found, and UKPN was made to pay £1.5m due to this “technical breach”.

A National Grid report following the power cut called it “an extremely rare and unexpected event” in which the level of backup power available was insufficient and around five per cent of demand was disconnected.

In a press release the IET said the report raised concerns about the resilience of the UK’s power networks overall and highlighted the need for greater coordination among operators.

Jonathan Brearley, Ofgem’s executive director, 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.

“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.”

At the same time as the lightning strike caused the two power stations to stop generating, approximately 150MW of smaller generation, known as distributed generation, also went offline.

National Grid ESO activated backup power generators to make up some of the shortfall and distributed generation to balance the system, but when there was not enough back-up power generation available, local network operators automatically disconnected some consumers from the grid in order to prevent further system-wide disruption.

In November 2019, it emerged that a third of UK businesses have suffered a power cut in the last year, which led some people to question the reliability of the nation’s power networks.

 

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