MorganEnergy

With the UK’s electricity supply now back in proper working order, the search for someone to blame for the blackout has begun in earnest. The Times has a number of good articles here, here and here that sum up most of what we have heard from our contacts. The Register also has a well informed article on the subject.

A particular issue that has emerged is that the unit at Longannet that failed at around the same time as Sizewell B was actually being fired up after maintenance. It was only operating at 350MW at the time it went out, and there is an open question as to whether National Grid should have been relying on it to quite the same extent as it would on normally operating units. This is really a question of how much you fine-tune your risk management, and how much reliability you are actually prepared to pay for. Sizewell B is the largest single unit in the UK system, and having it fail, for the first time in 3.5 years, is bound to throw up problems that only exist in the far reaches of the tails of your probability distributions.

Nevertheless, some commentators are pointing to the fact that National Grid is supposed to maintain a margin of at least 2,000 MW of reserve power, and the near-simultaneous loss of Sizewell B and Longannet amounted to only 1,510 MW of lost capacity. Therefore there should not have been a problem. However, as we noted yesterday, when the initial outages happened National Grid was confident that customers would not be affected. Problems only arose when several other major units also went offline.

So the Ofgem investigation (which seems fairly inevitable) will focus on two areas. Firstly, was National Grid doing its duty in keeping sufficient reserve capacity available to cope with losing both Sizewell B and another major unit at the same time? And secondly, were all the subsequent outages actually necessary, or were some of them attempts to manipulate market prices at a time when supply was known to be short? It seems likely that it will be impossible to prove any actual misbehavior, though an investigation may well lead to a tightening of codes to try to prevent this happening again. However, staff at RWE are probably feeling quite smug at the moment as they appear to be the only major generator that is not going to have consultants poring over their IT systems for several weeks looking for evidence of market manipulation.