National Energy System Operator: Blackout Risk

(Urgent Question): To ask the Secretary of State for Energy Security and Net Zero if he will make a statement on allegations from whistleblowers within the National Energy System Operator regarding summer blackout risk.

On 7 July, the shadow Secretary of State, the right hon. Member for East Surrey (Claire Coutinho), wrote to the Government alleging practices of poor information handling in NESO and interference in operational decision-making in the control room. The Government take this issue incredibly seriously. Since the allegations came to light, we have been engaging with NESO and Ofgem to establish the facts. Both my right hon. Friend the Secretary of State and I have spoken to the chief executive of NESO.

NESO has now appointed an external legal firm to conduct a full investigation into the claims, and a report is to be delivered to the board’s head of risk and controls and to Ofgem in the coming weeks. The legal firm will interview members of the control room, without any other NESO employees present. NESO has already responded publicly that all operational decisions are taken solely by authorised operational control room personnel, and that NESO does not instruct employees to avoid retaining records. We will work closely with Ofgem to monitor both the progress and the outcome of the investigation. However, it would be wrong to pre-empt that outcome, and the investigation must be allowed to run its course.

I want to make it clear that during this period of unprecedented extreme heat, the Great British grid remains stable. No customers were impacted by tight electricity margins, and NESO had a number of tools available to ensure our energy security. Great Britain has one of the most resilient energy systems in the world, and the Government work closely with NESO and the wider sector to ensure that this resilience is constantly maintained. Market notices, such as those issued by NESO during the heatwaves, are standard operational tools that can be used to support energy security, and these were used successfully to maintain grid stability. However, it is important to acknowledge that extreme heat events, such as those experienced this summer, are likely to occur more frequently as our climate continues to change.

Control room operators at the National Energy System Operator have the life-or-death job of balancing our electricity supply and demand. If they do not get it right, we will have blackouts, and in blackouts, people die; it is that serious. That makes what I am about to say all the more extraordinary.

I have been approached by multiple whistleblowers within our grid operator. Their allegations are: first, that on 23 June, the operator failed to meet the grid security standards put in place to prevent blackouts; secondly, that the corporate affairs team interfered with operational decisions—that is not something that the Minister denied—putting the reputation of the operator above security of supply; and thirdly, that operational decisions are being recorded in live documents, with no audit trail. Again, the Minister did not deny that.

I first raised questions on 2 June. Since then, we have had three public electricity margin notices—warnings to the market that we may be short on supply. I cannot stress enough that this is completely unprecedented. Multiple whistleblowers have now come forward. This, too, is unprecedented. I have raised this matter twice in the House. Despite the seriousness of the allegations, the Government shockingly dismissed me on both occasions as “scaremongering”. Considering the consequences of blackouts to people’s lives, that is nothing short of a disgrace.

NESO has now agreed to hold an external independent investigation. That is positive. However, while the Government wash their hands of this situation, the investigation that has been set up is a complete sham. It will not look into whether the grid is being run securely, or whether there was a breach of security standards on 23 June. It does not grant anonymity to any control room operator who wants to come forward. Those who are not selected by NESO management will have to ask those managers if they can participate, if they have concerns. Remarkably, on an all-staff call on Monday, the chief executive of NESO prejudged the outcome of the investigation by calling the allegations false, while senior management said that the whistleblowers had let them down. Let me be clear: the whistleblowers who have put the national interest over their own careers should be celebrated for their courage and integrity, not denigrated. Will the Government finally get a grip on this? Can the Minister guarantee that every single control room operator who wants to share their concerns will be given the opportunity to do so anonymously?

Order. Can I just remind those on the Front Bench—it is nothing personal; far from it—that you have only two minutes? Please, can we can try to stick to the rules? It makes things hard when we do not.

First, I reiterate what I said at the beginning of the statement. The shadow Secretary of State raised these concerns about whistleblowers who had been in touch with her for the first time at Department for Energy Security and Net Zero oral questions. I said to her, in that session, that if she had details, she should share them with the Department. She did that, and subsequently we have taken this matter incredibly seriously. A process has been put in place; an independent review will be conducted, taking into account the information that she has shared. If she has more information from subsequent whistleblowers, I am sure that she will share that with us.

We take this matter seriously. Nobody is washing their hands of this matter at all. As I have said to the shadow Secretary of State before, though, she is conflating two things, I think wilfully. There are questions to be asked about things that have been raised with her by whistleblowers, which we will now investigate. However, she suggests that the electricity grid was in a state in which blackouts were imminent, which is simply not the case. I gently say to her that it is irresponsible to suggest, in this place and on social media, that our energy system was at risk in recent periods. Electricity margin notices are a standard tool. I do not have time to read all the dates on which electricity margin notices were issued under the previous Government, but I can tell the House that they are a standard tool that has been deployed a number of times. We all have a duty to be careful about our words in this House. Ramping up the rhetoric does not get to the facts that we both share an interest in understanding. I make that point first.

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

Last week the Committee heard from Claire Dykta, the director of strategy and policy at NESO, who told us:

“Operational decisions are taken by authorised, trained personnel only.”

Her comments were confirmed by Alastair Martin, the chief strategy officer at Flexitricity, who, in the same session, said:

“I do not think the idea that the head office at NESO told the control room what to do is plausible.”

Does the Minister agree that it is important for public reassurance, especially at a time of threats to energy security, that the line is not crossed in any way between properly evidenced scrutiny on one hand and conjecture on the basis of rumour, which is verging on scaremongering, on the other?

I welcome my hon. Friend’s comments. Let me first reiterate that, as I said a moment ago, incredibly skilled staff work in the control room 24/7 to ensure that we are balancing our electricity demand and supply across the country, and have done so without any disruption to that supply; I pay tribute to the work that they do.

What I said earlier in response to the shadow Secretary of State was not that the allegations that have emerged today were somehow scaremongering. If whistleblowers have raised concerns, it is right and proper that we investigate them fully, and we will absolutely do that. However, it is scaremongering to take to social media or come to the House and somehow imply that we were close to blackouts, which is simply not the case. We have a responsibility in this House not to ratchet up the rhetoric simply to get some retweets on Twitter, but to take seriously the job of balancing our energy system, as we did every single day—and NESO has confirmed that.

I call the Liberal Democrat spokesperson.

These allegations are extremely serious. If it is true that NESO bosses instructed control room staff to conceal evidence of grid instability from public scrutiny, that is a shocking breach of trust from a taxpayer-owned body. The investigation must be genuinely independent and its full findings must be published openly, not quietly filed away. However, let us also be clear about the fact that this is not a verdict on renewables, much as science-denying climate change sceptics wish to push that idea. It is a warning sign that our grid is straining under record heat, that ageing gas plants are failing, and that there have been years of under-investment in storage and capacity. The Government must get very serious about grid resilience. Will the Minister guarantee protection for those who have come forward, commit himself fully to a genuinely arm’s length investigation, and guarantee full transparency in respect of the findings of that investigation?

The hon. Gentleman has made a number of important points. The terms of reference are available on Ofgem’s website for the inquiry that NESO has commissioned an independent law firm to carry out. It will conduct interviews with staff who were in the control room on that day to get to the bottom of the allegations that have been made, because it is right for us to take them incredibly seriously, and transparency will be an important part of that. I should add, however, that if there are lessons to be learned, it is critical that we implement them very quickly. NESO has already said—and the inquiry will discover further details in this regard—that corporate affairs staff are present in the control room at a number of times, but that they do not interfere in any way with operational decisions. Obviously the inquiry will get to the bottom of the operator’s views on that, but that is the point that it has made in recent days.

As for the hon. Gentleman’s wider point, I agree with him. It is important for us to recognise that grid stability is foundational to everything in our energy system. That is why we are investing record amounts in upgrading the grid so that it is resilient for the future; it is also why we are looking at how we invest in, for instance, storage—which the hon. Gentleman rightly mentioned—so that we can store renewable energy that we are generating until when we absolutely need it, and have more tools at our disposal at moments of tight margins such as the one under discussion. As I have said, however, although at times frequency moved outside the normal operating range, it never moved outside the statutory limits. We met demand for all customers, and there was no disruption for customers at all. That is an important fact that is borne out by all the data that has already been published, although it does not take away from the fact that if we have lessons to learn from those incidents, we will absolutely learn them.

I call the Chair of the Environmental Audit Committee.

I commend my hon. Friend’s approach. He is right to say that these allegations are incredibly serious, and that it is crucially important not only for there to be a full investigation but for it to be seen to be independent so that people can have confidence in it. He is also right to draw attention to the difference between the concerns that are raised by those whistleblowers and any suggestion that our grid is about to lead to blackouts. Does he agree that while it is absolutely true that one of the terrible legacies that this Government inherited from the last Government was a grid that had been woefully under-invested in for a very long time, and that there is a substantial need for investment in it in order to achieve our energy ambitions, that should not be allowed to be conflated with the suggestion that the lights are about to go out? Can he give confidence to my constituents this summer that NESO has given him all the assurances that he needs that there will be no blackouts?

I thank my hon. Friend for the way in which he has framed his remarks. He is right to say that these are incredibly serious allegations, and we take them with the seriousness with which they should be taken and will take on board any lessons learned. As for his point about the importance of grid investment, we inherited a grid that was not only in dire need of investment, but had not been designed to meet the full needs of generation that had been built for many years and not connected. We are currently constraining renewable energy that has been built over the past few years because it had not been connected to the grid. We are doing that work to ensure that the grid can continue to do what it needs to do.

As for my hon. Friend’s final point, let me state very clearly that electricity supplies were maintained throughout the June heatwave. No customer demand was subject to disconnection. Statutory frequency limits were maintained throughout the event, and the largest credible loss that could have occurred was also covered. Let me explain exactly what we mean by the margin in this instance. The margin represents the cushion of spare generation above the peak demand that is maintained by NESO, and at no point did we come close to breaching that. It did not indicate any kind of emergency situation. Demand was met, and those are the facts.

When I was in government we conducted one of the largest exercises, Exercise Mighty Oak, which involved more than 4,000 people testing the effect of a power outage. That exercise demonstrated that it cascaded very rapidly and that it very rapidly affected water supply, transport and other public services. Will the Minister confirm that he has had an opportunity to read the findings from that exercise, and can he update the House on what point the Government have reached in implementing its recommendations?

I pay tribute to the right hon. Gentleman, and to all who were involved in that incredibly important exercise. I was not aware of it at all until I came into this job and read the full report, as well as the breakdown of all the actions that had been started during his time in office and have been continued by officials now. As he says, the cascading impacts of a national power outage are extraordinary and very quick, which is why we are first investing in the grid to ensure that that remains a very low risk on the national risk register, and secondly taking forward all those actions. I do not have the detail in front of me, but very few of the actions remain open; most have now been completed. We are also, across Government, continuing to organise exercises—on a much smaller scale—to ensure that Ministers are prepared and that we continue to keep on top of the actions, because these are not one-time events. The water industry, to which the right hon. Gentleman rightly referred, must continue to look at preparedness. That is the wider work that we are taking forward on resilience.

I am grateful to my hon. Friend for coming to the House and providing clarity and reassurance that the allegations will be taken seriously, but does he agree that alongside the transparency of this process comes the need for responsible reporting and a responsible Opposition? The electricity margin notices are a standard tool that NESO has used for many years, and that includes the time when the Opposition were in government.

Yes, I agree. At the risk of repeating myself, electricity supplies were maintained throughout this period. Tight margins were caused by unprecedented warm weather—as I think we can all testify, having lived through it that week—and we were not alone in that. Other European countries were facing similar challenges and similar pressures on their electricity systems because of the extreme weather. I say gently that our aim as a House should surely be to do everything we can to prevent that extreme weather from becoming even more frequent, and I hope we will rebuild some of the consensus on that.

My hon. Friend is right to say that the margin notices are a standard operational tool. Although there is enough generation available on the system to meet demand, NESO would like to have an even bigger cushion on that generation, and that is what the electricity margin notices are for. They were withdrawn because that generation was met, and at no point were any customers disconnected.