Heathrow Substation Outage: NESO Review

With permission, Mr Deputy Speaker, I would like to make a statement on the publication of the report from the National Energy System Operator following its review into the fire at the North Hyde substation on 20 March. NESO’s review was commissioned jointly by the Energy Secretary and Ofgem in the immediate aftermath of the fire, which disrupted power supply to over 70,000 customers, including, of course, Heathrow airport, which closed operations on 21 March. While power from the grid was restored quickly to customers, there were significant secondary impacts to the aviation sector due to the associated closure of Heathrow airport.

My right hon. Friend the Secretary of State for Transport made a statement to the House at the time, where she committed that the Government would update the House as soon as the relevant investigations had concluded. That is why I am making this statement before the House on the day that NESO’s report has been published.

Before I update the House on the key findings of the review, I reassure hon. Members that the Government are taking action in response to the report. We will urgently consider the findings of the review and have committed to publish a Government response that will set out a plan on how the issues identified will be addressed in order to improve our energy resilience.

Having reviewed the report, I am deeply concerned—I am sure hon. Members will agree—that known risks were not addressed by National Grid Electricity Transmission, a key operator of our electricity system. NGET’s own guidance is clear, and based on the elevated moisture samples that NGET took in 2018, the asset should have remained out of service until mitigating actions were put in place, or the asset should have been carefully monitored until it could be replaced. NGET failed to take action appropriate to the severity of the risk at North Hyde. That was most likely the cause of the catastrophic fire on 20 March.

I spoke to NGET this morning and made it clear that the findings are unacceptable and that action must be taken to ensure that maintenance work on critical assets is prioritised appropriately. Fire suppression systems must not be left inoperable.

I am pleased to see that the regulator is taking swift action in response to the findings, announcing today that it is opening an official enforcement investigation into NGET. Ofgem will consider any possible licence condition breaches relating to the development and maintenance of National Grid Electricity Transmission’s electricity system at North Hyde. I spoke with Ofgem yesterday to express my support for that investigation and the planned audit of National Grid’s critical substation assets. That will be essential to understanding any other potential risks on the network and ensuring that those are being mitigated appropriately.

The report also highlights that North Hyde substation, which was built in 1968, is subject to different design standards than newer sites that were built during the 1990s. There was not sufficient distance or a physical barrier between two transformers at North Hyde, which allowed the fire to spread. It is essential that we consider the potential risk created by differing design and standards across the electricity network, particularly as we move towards clean power 2030. That will be a key focus of the Government’s response.

My Department and Ofgem will hold NGET to account for its role in the incident at North Hyde, but the extent of the impact of the incident on Heathrow operations must also come into focus. Heathrow Airport Ltd commissioned its own independent review, the Kelly review, which was published on 28 May and investigated the circumstances that led to the airport ceasing operations for most of 21 March. The review highlighted several recommendations to further improve the resilience of the airport’s internal electricity network. Those align with NESO’s findings that there are options to improve Heathrow’s own power resilience, which is the responsibility of Heathrow and not National Grid, and reduce the risk of further disruption at this scale.

Heathrow benefits from three separate supply points to the electricity network. It is rare for any site to have such a resilient connection to the network. As no energy system can ever be free from disruption, this is an opportunity for Heathrow to consider investing in its internal electrical distribution network to take advantage of those multiple supply points. I welcome the continued effective collaboration between Heathrow and energy operators as part of the review. My Department and the Department for Transport will work to ensure that that collaboration continues across those critical sectors.

Although such incidents are rare and the UK has a robust and resilient system, there are always wider lessons to be learned. The majority of recommendations made by NESO in its report suggest potential improvements that could be considered by operators across the energy sector. In collaboration with NESO, Ofgem and other industry partners, my Department will ensure the delivery and implementation of those energy recommendations. However, the report findings are also applicable to wider Government policy on resilience, both in the energy sector and across other critical national infrastructure sectors.

Ensuring the protection and resilience of critical national infrastructure continues to be a key priority for Government, with action already being taken. The Government’s recently published 10-year infrastructure strategy committed to strengthening resilience standards across critical national infrastructure. Further, the Cabinet Office will imminently publish the UK Government resilience action plan, which will articulate Government’s new strategic approach to resilience and is the outcome of the resilience review announced by the Chancellor of the Duchy of Lancaster in this place last year.

My Department is already taking steps to enhance our current approach to the designation of critical national infrastructure in the energy sector. We recently introduced specific licence conditions that give NESO responsibility for data gathering and technical analysis to independently inform the Government’s decisions on the designation of CNI, ensuring our most critical infrastructure in the energy sector is always as resilient as possible. We will work with the Cabinet Office and wider Government to develop a full response to the North Hyde report and set out how we will tackle some of the cross-sector resilience challenges highlighted, particularly given the importance of the energy sector for the continued operation of so much of our critical national infrastructure.

I want to restate that Great Britain continues to have a resilient energy network. Even though incidents such as this are rare, it is essential that we learn the lessons to maintain and, where possible, improve our resilience. The Government response will set out our plans for how we will continue to do so.

I thank NESO for carrying out such a comprehensive review over the past three months. The report shows the value of learning from past emergencies such as this. NESO’s newly established functions in energy resilience will enable Government, the energy industry and the regulator to truly understand whole energy system risks and mitigations, proactively ensuring that Great Britain continues to have a reliable energy supply, which is critical to the whole of society. I commend this statement to the House.

Before I call the shadow Secretary of State, may I take this opportunity to welcome her back to her place in the House?

Thank you, Mr Deputy Speaker. I feel older, wiser and significantly more sleep-deprived.

I thank the Minister for advance sight of his statement. I also thank NESO for its rapid work. The report is clear that there have been serious failings by National Grid to fix an issue that it knew about for seven years. The Minister is right; that is unacceptable. What is most important, though, is what happens now.

I have some questions for the Minister. First, who at National Grid made the decision to defer critical maintenance of the transformer in 2022? He said that he would hold them accountable, so how will he do that? He spoke about breaching licence conditions. What are the penalties for doing that and what accountability mechanisms will he use? Secondly, the report says that the North Hyde site did not meet modern standards on physical barriers between transformers. Can the Minister confirm he has asked National Grid to review substations with transformers built before the current standards were put in place? Thirdly, what steps will he take to look at the resilience of our energy system, particularly in the light of the heightened geopolitical risk that we all face?

The key message that we should take from the report on the Heathrow blackout is the importance of critical national infrastructure to our energy security and our national security. In that regard, it is the Secretary of State for Energy and Climate Change who is playing with fire. A week after the blackout hit Heathrow, Spain and Portugal gave us a stark warning of what happens when countries fail to protect their energy security: public transport down, payment systems down and millions of people unable to cook, travel or contact their families. Tragically, people lost their lives. In the case of North Hyde, the blackout affected schools, the London Underground, Hillingdon hospital and 70,000 customers, some of whom had to move out of their homes. That is the price we pay when we do not take energy security seriously. It is not a nice-to-have—energy is a basic need—and yet this Government are putting our energy at risk.

I was going to start—and I will, regardless of the rest of that speech—by warmly welcoming the right hon. Lady back to her place as the shadow Secretary of State. I will miss sparring with my Scottish colleague, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), although I am sure we will still have opportunities to do so. The right hon. Lady might come to miss the lack of sleep at home compared with the noise in this place, but she is very welcome back. She has obviously taken the last few months to write a wrap-up speech on a whole range of issues, and I am glad to give her the opportunity to pontificate here on many of those things, but let me stick to the questions that related to the statement that I have delivered to the House today.

The right hon. Lady asked about the role that National Grid has played. Ofgem has opened an enforcement investigation into this incident to get to the bottom of exactly what National Grid has or has not done, and whether there are possible breaches of licence. That investigation should now take its course. There are clearly serious questions to answer, and that is exactly the point that I put to National Grid today. I have asked for an immediate response on what action it is taking and for assurances that there are no further maintenance backlogs that it has not acted on, and I expect that by the end of this week. Ofgem has also instructed a wider audit of maintenance work across the energy system, which will identify if there are any similar issues. On the point about being held accountable, clearly I am going to wait for the outcome of Ofgem’s investigation. It is the responsibility of Ofgem as the regulator to determine whether National Grid is in breach of any of its licence conditions and what the appropriate action should be if it is. I will wait for those findings to come through.

The right hon. Lady raised an important point about the physical barriers. Clearly there are differences because the time at which some of our infrastructure was built and the different standards that were in place at different times. We need to make a wider review to see what is actually possible with some of this infrastructure; it was not always possible to build to the standards we now expect, but everything that is being built now is being built to the highest standards. I want the same assurances that she has called for: to know that anything that was built previously is safe.

I call the Chair of the Energy Security and Net Zero Committee.

It beggars belief that no action was taken after the risks were identified in 2018 at the North Hyde substation. The NESO report highlights a lack of information-sharing internally at National Grid and externally between organisations. It draws attention to the energy companies not knowing that Heathrow had a 10 to 12-hour arrangement for switching supply, and that National Grid did not appear to know that Heathrow was a customer of the substation. It is a matter of immense luck that the explosion and fire took place at 11 o’clock at night and that no one was present; otherwise, this would have been a very different discussion, with people having died. The Minister highlighted the unacceptable lack of action by National Grid. Will he ensure proper oversight and information sharing internally at National Grid and externally between organisations, so that we have safety and resilience in our national energy system, where it applies to critical national infrastructure and beyond?

First, on the point about joining up, my hon. Friend is absolutely right. The response that I have seen from National Grid identifies that as one of the points it will take away. It will look at information sharing and joining up the data in various systems, and at how to ensure that is followed through on. It is important to say that there is also learning, not just for National Grid but across the energy system, through looking at what other transmission owners do and at what the Government do around sharing information where we can. There is a lot of learning and a lot of recommendations will be taken forward.

On the question of Heathrow, much was identified in the Kelly review, which looked specifically at these operations. On the question of whether there was a single point of failure at Heathrow, the airport is one of the biggest consumers of electricity in the country and one of our most important pieces of critical national infrastructure. It is important that those at Heathrow reflect on this report and take some lessons from it.

The report has shown—this is a lesson for everyone—the importance of investing in electricity resilience and preparing for the worst, even if we think there is a low chance of the worst actually happening. I completely agree with my hon. Friend’s final point: it is in all our interests to spend time, effort and investment in making sure that our energy system continues to be as resilient as possible.

I call the Liberal Democrat Front-Bench spokesman.

This report is an utterly damning assessment of our national resilience, this time through decay but also through a lack of readiness as the climate crisis changes the dynamics, with old equipment operating at higher temperatures just as the loads for climate control and air conditioning are at their peak. The British people will rightly be alarmed that the problem that caused this substation failure was known as long ago as 2018, but there is a much wider point here. Beyond the technicalities of this failure, the resilience of critical national infrastructure has been neglected for far too long.

As an engineer, I came to this place for precisely this reason: we are too short-termist and too narrow in our vision. We cannot possibly expect to remain a world leader in infrastructure if we cannot future-proof and seriously invest in the resilience of our assets. Building and maintaining infrastructure might not get pulses racing. There is no ribbon to cut when something just continues to operate efficiently, but that long-termism is an ideology that we should all get behind if we are serious about Britain’s future. The report outlined the many missed opportunities to fix the issues at the substation, and we will all have to look seriously into Ofgem’s consequential investigation into National Grid once it is published.

This is not just about grid resilience, though. This time it was a fire caused by a fault, but next time it might be a deliberate cyber-attack or an act of terrorism, which could have a more disastrous impact. We must look beyond the short term, with a strategic and long-term plan to join up national infrastructure and make it safe and reliable for all. The Government must bring about a strategy and act quickly to review the resilience of all similar assets, including every UK airport—they are all critical to our national economy and our society.

With that in mind, can the Minister confirm whether an assessment has been made of the likelihood of a repeat of this incident, at Heathrow and at all other pieces of critical national infrastructure? Also, are the Government taking this opportunity to finally pick up the National Infrastructure Commission reports from 2020 and 2023, which were ignored by the previous Government, and the report from 2024, which was not implemented quickly enough, and to implement standards and frameworks for resilience in key sectors such as aviation, telecoms, water and energy, which will future-proof our ageing infrastructure to make it reliable and safe?

The hon. Gentleman is absolutely right to broaden this beyond the electricity system and North Hyde to take in wider questions around critical national infrastructure. He is also right about investing in the future. I always think that grids and networks set the heart racing a little faster, but that is just me. This is important, and this Government are investing in this infrastructure; just this week Ofgem announced record investment in it. I hope, given the importance of this statement, that Members on all sides of the House will recognise the importance of that investment.

On the points around wider resilience, the Cabinet Office is leading on trying to bring together what I think it is fair to say has been too fragmented a landscape in resilience across Government. My Department is responsible for a number of key risks in the national risk register. It is right that the lead Departments have expertise in certain areas, but if that information is not shared coherently across Government, we increase the chance of not getting the answers right. A lot of work is being done in that regard. We are also looking at how we share data across all sectors of critical national infrastructure within Government. We will say more about that in the resilience action plan, which the Cabinet Office is working on at the moment. Of course, the 10-year infrastructure strategy is also about how we will invest for the long term in the infrastructure that keeps our country running.

I call the Chair of the Science, Innovation and Technology Committee.

Speaking as a chartered electrical engineer and as the Chair of the Science, Innovation and Technology Committee, I am absolutely amazed that such an important and large part of our critical national infrastructure in the National Grid was not properly maintained for seven years and that Heathrow—the busiest airport in the world—had a single point of failure. The Minister has outlined some of the processes and procedures that will follow, but will he say how he intends to improve the standards of engineering maintenance culture and excellence in our critical national infrastructure, which have clearly been allowed to fall significantly under successive Conservative Governments?

First, it is important to say that Heathrow had multiple routes into its electricity network—three in fact—which is unique. This report and the processes identified in the Kelly review will give Heathrow Airport Ltd pause for thought on what it needs to do on how its network is configured and how it can adapt in such situations. Of course, this is an incredibly rare circumstance, but the whole point of resilience planning is to plan for eventualities that we think are extremely unlikely to happen but that would have a significant impact if they did. Heathrow closing is clearly one such circumstance.

Secondly, my hon. Friend is right to highlight standards and systems. I want to be careful not to prejudge the review that Ofgem has announced, because there is something to be said about standards changing over time. Maintenance backlogs obviously then have to be met, and if the issue is that maintenance that should have been carried out has not been, that is clearly an issue we will take forward. But if it is just that pieces of infrastructure were subject to standards that have changed over time, we have a wider question of how we can adapt some of that infrastructure for future standards. We will look at all those points. I repeat to the House that our electricity system is incredibly robust in its resilience. We need to do everything possible to make it even more robust, so that such instances do not have quite so significant an impact as this one did.

May I follow up on that and ask the Minister whether he will undertake to have a full, frank and open discussion with the relevant directorates within his Department about what it has learned from this disaster? In particular, what exercises, tabletop or virtual, must be undertaken to practise resilience in the event of future such failures? My right hon. Friend the Member for East Surrey (Claire Coutinho) is right to warn about the increasing fragility of energy security in this country. There is plenty of informed opinion that supports that view.

I have spoken to colleagues across the Department on these questions. They are rightly constantly looking at how we review our processes. Importantly, they are also working outside of Government and trying to break down some of the silos, so we are co-ordinating with different parts of Government that have different responsibilities. But the right hon. Member is right, and we will constantly push to do more of that.

The question of exercises is important. We had a really significant exercise under the previous Government, which looked at the Government’s response to a significant power outage. We are putting in place many of the recommendations from that exercise, which are important to take forward, but more exercise is useful.

I would slightly separate the response from the infrastructure itself failing, which is what we need to investigate quickly. The Kelly review set out that Heathrow’s response to the incident was in line with its response plan. Although the outcome was clearly not what any of us would have wanted, it goes to a wider question about the infrastructure at Heathrow, not so much the actual plan put in place when the incident did occur. Those are two slightly different things, but they are both extremely important.

I, too, thank the Minister for making this statement, and NESO for this damning report. Heathrow Airport Ltd’s power set-up internally virtually guarantees hours of disruption in a scenario like this. On 21 March, that meant over a quarter of a million passengers were affected; airlines lost significant revenue, for which they will not be compensated; and countless time-critical freight loads were also affected. Yet in Spain and Portugal, airports did not close when those countries had full power outages. By any definition, surely Heathrow airport counts as critical national infrastructure as it undeniably requires operational continuity. I note that the Minister confirmed the airport’s responsibility for its own power resilience, but does the Government have a role in ensuring that end-to-end power supply to critical national infrastructure is robust and that risks like power outages are managed adequately?

I thank my hon. Friend for the question and for her thanks to NESO, which has done a comprehensive job on this report in a fairly short space of time. There are lessons to be learned for Heathrow, and it will be learning those lessons. I am in communication with the Transport Secretary, who of course has immediate responsibility for Heathrow as a piece of critical national transport infrastructure. It is worth saying that its back-up generators did operate in the way they were supposed to, but Heathrow is a huge piece of infrastructure, and it is not intended that those back-up processes would continue to run normal operations in a huge airport beyond the immediate situation of being able to land planes safely and ensuring other critical systems within the airport.

The question Heathrow has to answer is on having three points of electricity generation coming into the airport. It clearly needs to look at the way the network is configured and take forward the wider question of its resilience and ability to adapt to such situations. The Government have an incredibly important role, as my hon. Friend rightly says, and we will do all we can to ensure that National Grid is doing its bit, that the distribution operator is doing what it needs to do, and that Heathrow Airport Ltd is also meeting the expectations that we would expect from our most important piece of transport infrastructure.

I call the SNP spokesperson.

The report by NESO has clearly uncovered serious structural failings at National Grid, but let us not forget that the Government’s response to the outage was severely wanting as well. On the Monday following the outage, the Transport Secretary confirmed that she was relying on the contents of a three-day-old conversation with Heathrow, with no assessment from the Government and no conversations with National Grid. Can the Secretary of State assure the House that sufficient lessons are being learned in Government to ensure that, when the power supply to critical national infrastructure is affected in the future, the Government are not left without answers again? Additionally, Members will understand the phrase “Quis custodiet ipsos custodes?”, meaning “Who guards the guards?” Why did it take such a serious outage for the National Grid to be audited like this? Surely better oversight may have identified the shockingly poor risk management.

Since I did not realise in my statement earlier this week that the hon. Gentleman is now the SNP’s energy spokesperson, I welcome him to his place—I hope he will bring the same customary sunshine that his predecessor in the role did to our deliberations in this place.

On the incident itself, clearly there are lessons to be learned from the way the energy infrastructure worked on 20 and 21 March, and for Heathrow on the configuration of its internal network and how that worked. The incident itself is clearly one we want to avoid at all costs, but actually the process was carried out safely, passengers were informed and the disruption was kept to an absolute minimum, but if an airport such as Heathrow closes, there will be disruption. I am not sure that I take the hon. Gentleman’s criticism of the handling of the incident. He is right on the broader point about how we ensure we are regularly auditing the processes of maintenance work going forward. The three transmission owners in the UK have a responsibility for doing that, and that is regulated by Ofgem, which regularly checks on this. The second part of Ofgem’s review announced today will look specifically at whether those maintenance backlogs and any other long-standing issues have been resolved, and look at the lessons we can learn on ensuring that those processes actually happen and that we do not just have things sitting on a list but not actually delivered.

The substation is located in my constituency and I was there on the day the incident happened. It was a massive fire and 200 of my constituents were evacuated from their homes during the night, and there was smoke flowing down the street. It could have been a much bigger disaster had it not been for the courageous firefighters who went on to the site, the help they got from the council, the back-up services and the NHS. I place on record the House’s congratulations to them and our admiration for what they did.

My constituents want to be reassured, but the report demonstrates a catalogue of failure. The problem was identified in 2018—we are now seven years on. I welcome the right hon. Member for East Surrey (Claire Coutinho) back to her place, but sleep deprivation can affect the memory: her party was in Government for most of that period.

I am worried that sites like this could be easily targeted by terrorist activity, so we need a process of reassurance. The recommendations set out in the review, about what we do from here to ensure resilience, have to take into account that the Government have a role in driving through the programme. We have to recognise that we cannot rely on some of the other agencies without a real Government thrust of leadership, but also securing accountability, because I do not want other areas to experience what we experienced that night.

I thank the right hon. Gentleman for his remarks and for the way he made them. He is absolutely right to recognise the heroic role that our emergency services played on the night—I am sorry that I did not say that at the start of my statement—as well as the engineers, who worked in incredibly hard in difficult circumstances in the hours that followed the fire to try to get services reconnected as quickly as possible. There are very serious questions to answer, and I hope that came through in my statement—it certainly came through in the conversation I had with National Grid earlier. We are seeking urgent assurances that the work that should have been done is being done, and that there are no other similar situations. Ofgem is taking the matter seriously, with two reviews, one into National Grid and the other into the wider energy system, to see if there are any further lessons to learn.

However, the right hon. Gentleman is right and I completely agree with his point that the Government need to be front-footed and take a leadership role in driving the work forward: we cannot leave it to individual companies to mark their own homework. We are doing that partly by bringing together our resilience work across Government, and I will soon be chairing a new group that brings together everyone who has responsibility for critical national infrastructure in our energy system, to ensure that energy security, cyber-security and other threats to our infrastructure are taken seriously, so that action is taken at the highest level of Government to ensure that we do not have a repeat of the incident in future.

The substation by Heathrow is probably one of the most important in the country, yet this damning report says that there was a “catastrophic failure” of maintenance. Given that National Grid also failed to recognise how close we came to a national blackout earlier this year, we have to ask: is National Grid grossly negligent and does the Minister still have full confidence in its management?

The hon. Gentleman may be confusing two things. The National Energy System Operator is no longer part of National Grid, as it was made into a publicly owned company by the previous Government, which was introduced by us when we came into Government. So the National Energy System Operator is responsible for managing the energy system and it is different from National Grid, which is a private company that operates the electricity network in England, so those two organisations are slightly different. Of course, he is right to highlight the scale of the failure. That is why I have given a statement today and why a number of serious actions are being taken, which will be followed up in a serious way.

We did not come close to a blackout earlier this year. It is important to repeat that, because there is a lot of misinformation about a particular set of statistics that were misunderstood by some people. We have never come close to that and we have never had a national power outage in our history. The aim of all the work that we do is to build as safe and resilient an electricity system as we can, so that when circumstances like this happen—because fires and accidents do happen—we will have done everything that we could have done to have mitigations in place. When such a fault is down to a failure of maintenance, we must ensure that is taken account of and never happens again.

Like any serious incident, this one had multiple causes, both operational and relating to design. I urge the Minister to ensure that the lessons learned are applied not only to electricity transmission and distribution sites, but to energy storage sites, for which we have an absence of standards. He rightly mentioned the need for redundancy and flexibility in our electricity systems, and the need to avoid having single points of failure. That applies well to large pieces of essential infrastructure, but is harder with our distributed critical infrastructure, for example around telecommunications, so we need diversity in our energy system as a whole. Does he agree that in our energy system, we need widespread availability from multiple parts of the energy sector, with electricity being backed up by, for example, hydrogen and ammonia?

My hon. Friend always reminds me how much he knows about many of these issues; it is hugely welcome. He is right: there are wider lessons to be learned across the system, and not just for large critical national infrastructure. As he says, we have a grid that has many more power stations, of different forms, than we have ever had in the past. There are also lessons to be learned for storage, which is rightly becoming increasingly important for our energy mix.

On his wider point about telecoms, in the wake of the storms earlier this year, we took a number of actions to make our electricity system more resilient. Our use of telecommunications equipment in this country is changing. Very few people now have access to traditional copper wire phones, so when telecoms equipment goes down, there is an immediate significant impact on people’s lives. I recently met the Minister for Data Protection and Telecoms in the Department for Science, Innovation and Technology to discuss this issue. We will work with Ofcom and the operators to ensure that the telecoms infrastructure is as resilient as it can be.