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Power Companies Pay £10.5 Million for August Blackout

lightning

Ofgem’s investigation into the August blackout has led to £10.5 million in payouts, from owners of the generators which lost connection and from UK Power Networks.

More than a million people in England and Wales were plunged into darkness and the transport network disrupted after near simultaneous lightning strikes disconnected the Hornsea One wind farm in the Humber and the Little Barford gas powered plant in Bedford from the grid in the evening of 9 August. This led to a loss of 1.4 gigawatts, or around 5% of the grid’s electricity.

The owners of the two generators, Orsted and RWE, will now each pay £4.5 million in Ofgem’s voluntary redress fund for failing to stay connected.

At the time of the outage, local network operators automatically disconnected some consumers from the grid to prevent disruption to the system. Ofgem’s investigation found that one operator, UK Power Networks, began reconnecting consumers too soon, before being advise by National Grid Electricity Systems Operator (ESO), which put the recovery of the system at risk. 

UK Power Networks will consequently pay £1.5 million into the redress fund. 

The redress fund, run by Ofgem and administered by the Energy Savings Trust, supports schemes and charities assisting vulnerable energy customers. 

Jonathan Brearley, Ofgem executive director, 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.”

Ofgem also said it had “identified issues” with National Grid ESO’s management of the system and will be investigating its structure and governance.

The investigation into National Grid could also led to fines for the company, which owns and operates much of the UK’s energy infrastructure, of up to 10% of its annual turnover.

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

The blackout is estimated to have cost £15 million. However, in December, Iain Staffell, senior lecturer in sustainable energy at Imperial College London, said that figure may not account for the full economic impact, given the significant disruption to the transportation system and to services.

Lauren Smith
Lauren Smith

Lauren Smith has worked as a journalist and copywriter for most of the last decade, covering technology, energy, and consumer rights, in the US and UK.

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