Coming full circle [electricity supply industry

Abstract

A good many changes have taken place since the early days of electricity supply. In 1889, all generation was, as we would regard it, embedded. Even in 1913, London boasted 65 electrical utilities and 49 different systems operating at ten different frequencies. Perhaps the industry is not so fragmented today after all. Nationalisation brought about much consolidation and undoubtedly a whole host of synergies were exploited. The whole nationalisation process was underpinned by a philosophy of affordable and reliable electricity for all. There may well have been a great many things wrong with the CEGB and the area boards, but neither the morale of the workforce nor the level of job satisfaction were among them. Following privatisation many changes were made but from a consumer point of view little appeared to change. However, recent events such as British Energy's financial difficulties, PowerGen's decision to mothball ten generating stations, the host of problems facing small-scale and renewable generators as a result of the New Electricity Trading Arrangements and the government's pending energy White Paper are bringing a number of issues to a head. There must be a rethink on the whole issue of energy trading. Renationalisation is being muttered in political circles and public opinion may well support such a move. What is clear is that, in the light of the California energy crisis, the government could find itself forced to take radical steps to ensure that the lights stay on. Whilst the present status-quo is nominally competitive, the margins enjoyed by energy supply companies are low. Furthermore, maintaining a high quality of reliability, availability and safety when dealing with ageing infrastructure is a challenge hindered by Ofgem's rhetoric of incessant cost reduction and working systems harder.