Policy paper

Introducing a new ‘Electricity System Restoration Standard’: policy statement

Published 1 April 2021

This was published under the 2019 to 2022 Johnson Conservative government

Introduction

Great Britain’s dependence on electricity extends far beyond a simple reliance on electrical devices and lighting, with national infrastructure networks, public services, and economic activities all reliant on a stable network.

This government understands the important role that businesses, communities, regulators, national, devolved and local governments play in building a safer, more resilient, and more prosperous UK. We all have to work together to ensure that the services we rely on are available for citizens to use when they need them, and that people’s health and safety is always protected. The Department for Business, Energy and Industrial Strategy works extensively with National Grid Electricity System Operator (NGESO) and other infrastructure operators, to plan for and mitigate risks that could disrupt our energy supplies. This includes the risk of a nationwide electricity failure.

A nationwide electricity failure has never occurred in Great Britain; however, similar scale events have occurred internationally, most recently in South Australia, Argentina, and the United States of America. This demonstrates that whilst it is unlikely, it is a credible risk for our energy network. The 2020 National Risk Register categorises widespread electricity failure as a high impact, low likelihood risk. Therefore, as much as we may hope it will never occur, we must adequately prepare for the worst-case scenario.

Significant work has been undertaken by the electricity industry to prevent widespread electricity failure – NGESO has a range of tools to keep the electricity system in balance and the National Electricity Transmission System is highly resilient with automatic tools and protections to guard against faults and system-wide failures. In the event of a total or partial shutdown of the National Electricity Transmission System, NGESO has robust procedures to restore power. To ensure our electricity system remains resilient in future years, the Department for Business, Energy and Industrial Strategy, working with our Industry partners, the devolved administrations, and the energy regulator Ofgem, has undertaken a review of the current regulatory framework for dealing with widespread electricity failure.

Today the government’s is announcing its intention to strengthen the current regulatory framework by introducing a legally binding target for the restoration of electricity supplies in the event of a nationwide electricity failure – a new Electricity System Restoration Standard.

Engagement and outreach

This Standard has been developed with significant engagement from electricity stakeholders including generators, network companies, and NGESO. A Task Group under the Energy Emergencies Executive Committee (E3C) was established with the purpose of developing and performing a robust cost-benefit analysis that balanced the cost of providing the public with a robust restoration process, against the low likelihood and high impacts of this risk.

The government, considering relevant views, evidence, and analysis, consulted on the findings and proposed policy with parties that would be affected by it, including generators and consumer groups such as Citizens Advice. All parties have been supportive of the establishment of a new Electricity System Restoration Standard, so long as it is implemented in a way which does not commercially disadvantage individual parties.

The new ‘Electricity System Restoration Standard’

This new Electricity System Restoration Standard will require NGESO to have sufficient capability and arrangements in place to restore 100% of Great Britain’s electricity demand within 5 days. It should be implemented regionally, with an interim target of 60% of regional demand to be restored within 24 hours. The Electricity System Restoration Standard will reduce restoration time across Great Britain and ensure a consistent approach across all regions.

Ofgem Consultation

Ofgem has launched a consultation on its proposed modifications to the Electricity System Operator’s licence condition to create the power for the BEIS Secretary of State to set a new Electricity System Restoration Standard. Subject to the outcome of the consultation, the NGESO’s license condition will change later this year.

The BEIS Secretary of State will then issue a legal direction to NGESO requiring it to comply with the agreed restoration time no later than 31 December 2026.

Ofgem’s consultation has been announced: Consultation on licence amendments to facilitate the introduction of an Electricity System Restoration Standard.

Next steps for National Grid Electricity System Operator

If the proposed licence modifications are implemented, NGESO will need to promptly consult with industry parties on the services it will need to establish or procure to comply with the new Electricity System Restoration Standard. Once these have been agreed, industry partners will need to upgrade their capabilities.

This government has put net zero and our effort to fight climate change at its core, therefore these new capabilities, which are essential to ensure the reliability, resilience, and affordability of our energy system, will align with our net zero commitments.

All changes should be implemented as quickly as possible and NGESO must ensure that the power sector can meet the restoration time frame by 31 December 2026.

In the interim, Ofgem would put in place processes to monitor the implementation of the new Standard to ensure that the ESO remains on track with meeting this provision as part of its licence obligations and that any new services will not commercially disadvantage individual parties.

Monitoring

Once fully implemented, the Electricity System Restoration Standard will have a robust assurance framework that establishes a baseline level of testing and exercising of restoration capabilities, across the power sector.

Ofgem will be responsible for monitoring this on an annual basis, providing the necessary assurance and confidence that the restoration process can be carried out across each region as intended.