Heathrow Substation Outage: NESO Review

Roger Gale Excerpts

Wednesday 2nd July 2025 Commons Chamber

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)]

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.

[Mr Deputy Speaker (Sir Roger Gale)]

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

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[Michael Shanks]

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.

On the wider resilience questions, I am not going to get into a back-and-forward on the frankly quite ludicrous claims that the right hon. Lady made. I hope this is not an indication of the tone we can expect in the years ahead, because there are some difficult decisions for us all to wrestle with. There is the really important question about delivering our energy security in, as she says, an increasingly uncertain world. We are sprinting towards clean power to remove the volatility of fossil fuels from our system. She opposes all of that investment. There is also a critical role to play in upgrading the network infrastructure across the country, which her party also opposes.

There are some really searching questions for the Conservatives—who were, of course, in charge of this infrastructure for 14 years—about their role and what part they want to play. It is easy to shout from the sidelines with accusations. It is far more useful and important for a party that was in government for 14 years and is now the official Opposition to come up with some credible questions about how we deliver the energy system of the future. We are going to get on with delivering it.

[Mr Deputy Speaker (Sir Roger Gale)]

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

[Bill Esterson (Sefton Central) (Lab)]

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?

[Michael Shanks]

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.

[Mr Deputy Speaker]

I call the Liberal Democrat Front-Bench spokesman.

[Luke Taylor (Sutton and Cheam) (LD)]

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?

[Michael Shanks]

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.

[Mr Deputy Speaker (Sir Roger Gale)]

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

[Dame Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)]

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?

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[Michael Shanks]

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.

[Mr Deputy Speaker]

I call the SNP spokesperson.

[Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)]

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.