Power outages and the danger of efficiency: Rewiring for resilience

To lose one substation may be regarded as a misfortune: to lose two looks like carelessness. So, Oscar Wilde might have written, had he been born a century later and taken an interest in energy systems.

In an extraordinary three-month period for the UK power system, we’ve seen not one, but two major substation fires bring critical national infrastructure to a standstill. In March, a fire at one of Heathrow’s three substations shut down the entire airport, grounding flights and triggering widespread disruption.[1] Then, just over a month later, another fire crippled large parts of London’s Underground and Overground networks.[2] Add to that the Iberian Peninsula blackout in April (an outage of staggering scale) and it’s hard not to ask: what on earth is going on?

A system built to fail

Contrary to what we might intuitively think, these aren’t freak events or statistical anomalies. They are the predictable consequences of an energy system and an economy that, for decades, has been ruthlessly optimised for cost and efficiency – at the expense of resilience.

From the 1950s onwards, Great Britain’s electricity system was built around centralised generation. Large power plants were sited near coal fields, sending electricity over long transmission lines to where it was needed most. That core architecture remains today. Even in the era of decarbonisation, wind and solar are generally located where conditions are favourable, not where demand lies.

At the same time, we have seen chronic underinvestment in this infrastructure. Total capital investment in energy systems declined significantly over the decades following privatisation, as regulatory incentives emphasised efficiency, and defined consumer protection largely as keeping bills low.[3] Caught between this regulatory pressure and the need to provide returns to shareholders, the consequence was, unsurprisingly, the sweating of assets. Any notion of spare capacity was generally viewed as cost to be squeezed out, and even today, new grid investments must prove “need” to be sanctioned.

Brittle by design

The problem actually goes far deeper than outdated kit. Centralised energy systems are inherently vulnerable by design, seriously exposed to the risk of failure, cascading disruption and malicious attack. That is why Russia has repeatedly targeted Ukraine’s power grid – large power stations make for easy targets.[4] This strategic vulnerability and fragility isn’t an accident - it’s a design feature of systems optimised for the lowest cost.

At the same time, it is increasingly recognised that as a species, we humans are really quite terrible at judging risk. Risk experts talk about “fat-tailed distributions”, which is a way of saying that rare but devastating events happen more often than you'd expect.[5] In today’s volatile world, where cyber threats, geopolitical shocks, pandemics, and climate extremes are alarmingly frequent, so-called “black swan” events are not rare, they are surprisingly normal.

This means we have built an energy system that has been finely tuned to operate in an equilibrium that is being regularly shattered. Our over-optimisation leaves no margin for error, and when the inevitable occurs, consequences escalate quickly.

What is critical infrastructure for?

To fix this, we must ask a very simple question: what is the energy system for?

Too often, we treat critical national infrastructure (CNI) as a cost centre to be minimised and judge it by its price to us. But we wouldn’t run a military operation with the primary objective being to minimise costs, and we don’t measure a hospital’s success solely by its operating costs. Why should energy be any different?

Those things are important, but hardly their core purpose. The true role of infrastructure is to enable everything else in society and the economy. It’s the connective tissue - the roads, rails and wires that support business, public services, and even our defence. Our objective shouldn’t be to deliver the cheapest possible energy system, rather to put in place the most valuable, dependable, and secure enabling platform for all the things we want to do with it.

We need it to be strong - to be there when we need it most, not simply cheap the rest of the time. Strong systems don’t run at maximum capacity all the time. Like an athlete’s muscle, strength comes not from constant stress, but from the recovery and adaptation in between. Instead of minimising cost at every turn, we must start maximising resilience.

We knew what to do, but didn’t

All of this was pointed out over 40 years ago, when the Pentagon commissioned a study into energy security.  In1982, Amory Lovins and L. Hunter Lovins published the seminal Brittle Power, building on Amory’s earlier work on “soft” energy pathways. This brilliant book highlighted the serious weaknesses in centralised power systems reliant on imported fossil fuels, and proposed moving to decentralised, renewables-based system at a time when this was a radical idea.[6] Largely overlooked by policymakers at the time, we have now stumbled into deploying much of what the Lovins’ recommended, but for climate and economic reasons.

We are starting to build inherently diffuse renewables, and uptake of decentralised generation and local backup and storage is on the rise. But there is a long way to go. We really need redundancy built-in by design, strategic diversification of energy sources, multiple grid pathways to avoid single points of failure, and performance metrics focused on long-term reliability.  And finally, we need far greater emphasis on simulation and preparedness, treating infrastructure failures like national security exercises - war-gamed, rehearsed, and continuously improved. All of this must combine to reduce systemic fragility and be delivered via an integrated design and coordinated plan for the future energy system.

Of course, no system is perfect. Decentralisation introduces its own operational challenges and is not immune to attack, and it’s unreasonable to think that the UK can completely transform its energy system. However, the more decentralisation, renewables, backup and redundancy that we can build in, the more we can spread risk and increase resilience in the face of disruption.

A once-in-a-generation opportunity

Building this resilience into our infrastructure isn’t just an engineering challenge, it’s an economic and leadership one. It means aligning regulators, operators, policymakers and investors around a shared strategic vision, and then embedding that into real delivery plans, market designs, governance, and incentives. At Oaklin we’ve seen first-hand how organisations can rethink project portfolios, investment strategies and reporting frameworks to reflect resilience as a core value, not just a compliance obligation. The shift is cultural as much as it is technical.

And we have a once-in-a-generation opportunity to get this right. The UK’s National Energy System Operator (NESO) is currently preparing a Strategic Spatial Energy Plan.  Rather than fall into the trap of simply replacing centralised fossil generation with centralised renewables, we must approach this considering not just the cost of our energy system, but what we want to use it for and what we need it to withstand.  We must design the sort of system that makes the recent power outages a thing of the past. And we urgently need to integrate energy and other infrastructure into national security planning, sharing strategies and skills between energy, cyber and defence sectors.

None of this is simple. Trade-offs between cost, reliability, and speed are real and different stakeholders will value them differently. Any additional costs to ensure resilience cannot escape the context of a very real cost of living crisis and the need to ensure the affordable supply of energy. But much of the retail cost of energy is a political choice, from tax to policy costs, and political choices can be changed. What is clear is that continuing to optimise only for short-term price leaves the system dangerously exposed.

The mindset shift

Investing in resilience is ultimately an insurance policy, and one we would be wise to take out. But in doing so, there are many important questions to answer: How do we design markets to value spare capacity, not just price? How should energy companies be incentivised to invest more capital and earlier? Where can community energy play a bigger role? What would cross-sector (energy, cyber, defence) scenario planning look like?  What sort of regulatory frameworks could better value resilience?

However those questions are answered, it’s clear that the time for diagnosis is over. We know how to build systems that bend not break, and the shift is one of mindset - from lean to resilient, from cheap to secure, from just-in-time to just-in-case.

And we can’t afford to keep hoping someone else will fix it. Resilience must be baked into every project, every investment, every policy, every regulation, every market, every economy. At Oaklin, we’re proud to be helping clients turn strategy into delivery - building systems that don’t just work when the sun shines and the going is good, but that are there when it matters most. We have one shot to design an energy system that powers and protects our future. Let’s make it count.