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Producers not Consumers Now Control the UK Electricity System

May 30, 2017

By Paul Homewood

From GWPF:



A recent press statement by the United Kingdom’s Transmission System Operator (TSO) shows that the consumer interest is no longer in the driving seat. The system is now run for the convenience and benefit of electricity producers.

On Friday afternoon last week National Grid issued a widely reported statement to the effect that at lunchtime on that day the instantaneous output from the United Kingdom’s nearly 12 GW of solar photovoltaic generation was 8.7 GW, which just over 24% of the load at that time and a new record.

National Grid developed its theme thus:

An increase in renewable generation poses an exciting challenge for National Grid, whose role as system operator is to balance the national transmission network, by ensuring supply and demand is matched second by second.

Duncan Burt, who’s responsible for control room operations said: “We now have significant volumes of renewable energy on the system and as this trend continues, our ability to forecast these patterns is becoming more and more important.

“We have an expert team of forecasters who monitor a range of data, to forecast just how much electricity will be needed over a set period.”

Duncan added: “We have planned for these changes to the energy landscape and have the tools available to ensure we can balance supply and demand. It really is the beginning of a new era, which we are prepared for and excited to play our part”.

Clearly written in haste so as not to miss the moment (“who’s responsible”), this incoherent statement reveals that National Grid is still coming to terms with a genuinely novel situation, one that they can hardly believe, so extraordinary and so favourable is it to their company’s future. It is certainly “exciting” for them, commercially exciting.

Hitherto, forecasters have indeed been concerned with predicting “just how much electricity will be needed”, but as the previous paragraphs show with the advent of a renewables dominated grid they are now engaged on forecasting what is about to be produced. The significance of this change cannot be overstated. The consumer has become a secondary consideration; and the producer interest is now the main focus of National Grid’s attention. Of course, though it has a regulated income and asset base, National Grid is itself part of that producer interest. The grid management “tools” to which Mr Burt refers, software, personnel, and hardware are expensively purchased with consumer funds, but without consumer consent. National Grid will balance the system brilliantly, of course, but very expensively.

If the United Kingdom is to flourish, this mistaken inversion of priorities must be addressed by the next government. The Conservative Party Manifesto remarked that:

A successful industrial strategy requires competitive and affordable energy costs. We want to make sure that the cost of energy in Britain is internationally competitive, both for businesses and households. (p. 22)

One can hardly imagine that sensible people in the other political parties hold any other views. This is motherhood and apple pie. However, as National Grid’s release shows, policies have in fact over the last decade or so, forced the consumer into a subordinate and powerless position, one where it is very unlikely that energy costs will be either competitive or affordable.

The implications for inward investment and the reindustrialisation that many now seem to desire are obvious. Where will an investor prefer to place capital in the hope of generating a return? An economy where electricity demand drives supply, or one where the System Operator forecasts supply and then adjusts demand accordingly? Even if there are rewards on offer for flexible consumers, the truth is that most businesses would prefer complete freedom of operation rather than a compromised liberty and the occasional lollipop.

  1. dave permalink
    May 30, 2017 9:09 am

    Can I switch energy supplier – to Vietnam?

    • tom0mason permalink
      May 30, 2017 1:07 pm


  2. Derek Buxtona permalink
    May 30, 2017 9:13 am

    He must be the stupidist man ever to be in charge of an essential public service as the Grid. He cannot forecast the wind strength and hence power output with any accuracy at all. He is surely due for the sack, if we ever get a government that puts Country and People first. His job is to supply the energy we need, as we need it, if he cannot fulfill that he should not be there. Heath once created rationing of energy when we were far more capable of handling it than we are now……power failure would now be a disaster with deaths rising and a total shutdown of everything we depend on from day to day.

  3. May 30, 2017 9:13 am

    Perhaps BA was the first to suffer from this situation as their only comment I have seen regarding the problems over the weekend was power problems?

    Next on the list for random shut downs, Hospitals, Railways, water treatment plants, or they could shut down something useless like the Department of Energy & Climate Change or OFGEN.

  4. Derek Buxton permalink
    May 30, 2017 9:17 am

    sorry, an extraneous “a” has suddenly appeared at the end of my name. lazy fingers or brain. apologies.

  5. May 30, 2017 9:41 am

    But where will all these companies go? The UK is not alone in prioritising the producer since the whole thrust of the move away from fossil fuels everywhere is intended to be supply management dressed up as demand management.
    We must never take our eye off the ball; the “watermelons'” aim was, is, and will be to “unpick the industrial revolution”, everywhere and always! CO2 and climate are simply a smokescreen.

  6. May 30, 2017 10:46 am

    There was a time when NG could accurately forecast demand from tens of millions of consumers dependent on the day, the time of day and the weather and they could adjust production accordingly to maintain a stable supply. Now they have no idea of demand because they have no idea how much uncontrollable and unmetered renewable electricity is entering the local distribution networks. It is a mad mad world we now find ourselves living in.

  7. Athelstan permalink
    May 30, 2017 11:24 am

    Moonbeam technology, Murphy’s law, sod’s law and the law of unintended consequences and deliberately so designed methinks, will see us all back living in caves, they call it ‘progressive politics’, there are no words to describe just what I think.

    • May 30, 2017 11:53 am

      – moving forward, making progress, advancing by successive stages. (Chambers)
      – supportive of socialist ideals, tending away from independent thought especially for those unable to comprehend the benefits bestowed on them by a caring (joke) state. (Socialist philosphy)
      – looking backward to a theoretical golden age, regressive. (Any enviromentalist)

      • Athelstan permalink
        May 30, 2017 3:21 pm

        As you know and demonstrate in your marvellous posts, together, we aver, we must all move forwards.

        Mike, the climate never ceases, seemingly timeless, relentless, remorseless, implacable. I would baulk at being named “progressive” – world weary at mankinds gormless streak in that, we always do the same old ***t but ever hopeful that we can turn the corner, “optimistic”??………….hmm, that is, another matter.


  8. Dung permalink
    May 30, 2017 12:13 pm

    I wrote this on Bishop Hill a few days ago and this just backs it up:

    We now have ‘Government of the people, by the state, for the state’

  9. Jack Broughton permalink
    May 30, 2017 3:18 pm

    I liked the comment in Matt Ridley’s article that we moved forward from wind power to heat engines in the 19th century. One could add that we moved forward from small distributed power generation to a national grid (that has served us very well until now) in the 1950s. The regression to unreliable power sources and small scale generation can only end in tears: history has a sad habit of repeating itself.

    By load management and storage it seems that time of day tariffs are near with switching off poorer people to manage the grid very soon. The “smart-meters” are part of this strategy and are being offered with incentives at the moment to suck people in

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