BRAIN FOOD: Behind The Spin - National Grid Transco

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Last Updated: 31 Aug 2010

THE DILEMMA

As Christmas approaches and the mercury plummets, National Grid Transco must be praying that this winter will not be one of electrical discontent.

Britain's electricity and gas network operator accepted responsibility for London's power cut in August when thousands of Tube commuters were left stranded and 410,000 homes and businesses were without power for 37 minutes. The blackout raised concerns about the quality of NGT's infrastructure.

NGT blamed human error - an incorrectly installed relay protection unit at its Wimbledon sub-station - but critics, including London mayor Ken Livingstone, attributed it to NGT's cost-cutting. CEO Roger Urwin admitted that half the network's 7,000 staff had left since privatisation in 1990, but said £3.5 billion had been invested since '93. NGT's problems were compounded by a power cut in Birmingham and an allegation by the BBC's Today programme that a maintenance failure caused the London crisis.

THE SPIN

NGT denies that the London failure was caused by under-investment or lack of skilled staff. Says Urwin: 'It is a discrete event, one that we are going to get to the bottom of and learn from and not have a repetition of.' NGT insists that there are sufficient power stations and gas supplies to meet demand in a normal winter, but is concerned that resources are insufficient to cope with freak demand surges or plant breakdowns in a very severe winter.

THE STRAIGHT TALK

Industry pundits are sceptical. 'I don't think you'll find many people in the industry who can guarantee there won't be blackouts this winter,' says David Porter, CEO of the Association of Electricity Producers. City comment is more positive. Says Phillip Green, Merrill Lynch's utilities analyst: 'Suggestions that there has been under-investment in the grid are not true. There may well be issues to address, but nothing is fail-safe.'

THE VERDICT

Desperate to avoid a rerun of last December's debacle, when two power stations broke down, NGT has asked power generators to hike up electricity production. To cope with breakdowns and demand surges, it's industry standard that spare capacity should run at 25%, but it now stands at 17.7%. International Power and Powergen have both responded to the call (and rising wholesale electricity prices) by taking a power station out of mothballs. But will this be enough to keep the Christmas lights glinting?

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