August Power Cut Results in £10.5m Compensation Payout

By : Business Save |January 21, 2020 |Energy Blog |0 Comment

Three energy firms are to pay a total of £10.5 million in compensation due to a power cut last August. The black out left over a million people without any electricity and caused serious travel problems.

The power cut lasted less than an hour, but many homes and businesses were affected as well as local hospitals. The power cut hit just before five o’clock on Friday evening on August 9th. Rail services were also severely disrupted and took several days to return to normal operations.

Compensation to be Paid into Redress Fund

The three firms ordered to pay up are RWE Generation, Orstead and UK Power Networks. The redress fund they will pay into is managed by the UK’s energy watchdog, Ofgem. The fund is also overseen by the charity Energy Savings Trust.

RWE Generation operates the Little Barford Power Station and will pay £4.5 million into the redress fund. Their role in the black out appears to have been not remaining connected after a lightning strike caused the original power cut. Orstead operate the Hornsea offshore wind farm and will also pay £4.5 million for the same reason as RWE. As an energy distributor rather than generator, UK Power Networks will only pay £1.5 million. Their role appears to be limited to a technical breach of rules.

Ofgem are continuing to investigate the role played by National Grid in the power cut. They have already identified issues surrounding their system management but the results have not yet been finalised or published.

Power Cut Due to Failure of Two Large Generators

Ofgem said of their findings: “[Our] investigation into the power cuts of 9 August found that the combined loss of two large generators, as well as the smaller loss of generation at a local level, together triggered the subsequent disconnection, loss of power and disruption to more than one million consumers.

“This included many rail passengers. Ofgem has worked closely with the Office of Rail and Road which has today published its findings into rail companies’ roles in the disruption. It found that software flaws on some trains caused extended delays for commuters.”

UK Power Networks’ Technical Rule Breach

Ofgem discovered that UK Power Networks had begun reconnecting customers without being asked to by National Grid. This could have potentially jeopardised recovery of the system.

Ofgem also stated that their actions had no impact on the power cut itself. UK Power Networks also recognised they had made a technical rule breach. Ofgem noted they took ‘swift action to prevent any future reoccurrence’, agreeing to pay £1.5 million into the redress fund.

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