The Point

Last updated: 27 June 2022.

Power: A Winter's Tale

Did you know that UK PLC nearly ran out of power during 'the Beast From the East'? Thought not. Derek Stewart MacPherson delves into the history files to explain why, and just who was to blame.

I want to talk to you about power. Not political power, or entrenched patriarchal power, but the everyday kind you get from the socket in the wall. Because I heard something very disturbing indeed recently - the UK almost ran out of gas, at the worst possible time. Now at the time I heard about this, it was Thursday the 1st of March, and I was stuck on the other side of the world, in Melbourne, where it was still uncomfortably warm. If you were in the British Isles, you were currently in the grip of the Siberian weather system known as the 'beast from the east' so that could have been a very real problem. We all know now that it didn't happen. If it had happened then you'd all no doubt be well aware of it, and there would probably be an enquiry into the reasons. And if you've read anything by me before, you may well not be entirely surprised to learn that I'm going to blame the Tories for the entire mess.

They are entirely responsible for this though, through incompetence, mismanagement and just plain greed. And I'm here tell you why (because this is nowhere near well enough understood). It's not really the present day Tories who are to blame, although it is happening on their watch, and they haven't done anything to prevent it, so they cannot escape blame entirely. No, I'm talking about the Tories of an earlier era, the 1980s, and of course one Margaret Hilda Thatcher.

As with so much of what is wrong with today's UK, it started with her. Of course privatisation has a lot to answer for, and I'll be coming back to that later, but that wasn't the start of it. It actually started in the early 80s, when we faced a number of strategic decisions about power generation. We had, at that time, a significant number of coal-fired and nuclear generators (including all of the 1950s Magnox reactors for instance) which were approaching the end of their design lives. The government still owned all of them at this point.

So, with major shortfalls in capacity expected by the early 90s, decisions on replacements had to be made, because the time lag from turn-of-sod to turn-of-key for 1GW+ power stations, both nuclear and coal-fired plants, is typically seven years. But Thatcher was determined to destroy the NUM, so she didn't want to order any new coal-fired stations at that time.

So what about nuclear, you may ask? Well, as a result of her 'price of everything, value of nothing' philosophy, she decided to build more nuclear power stations, but at the cheapest available price. So a bidding war started, with the choice coming down to the leading US design, Westinghouse's Pressurised Water Reactor, or PWR, and the British design, Babcock & Wilcox's Advanced Gas-cooled Reactor, or AGR. The AGR was widely acknowledged in the industry to be the safest available design at that time, however the PWR came in a bit cheaper, so the decision was eventually made to go with that. However, due to the delay, before any actual starts could be made, Chernobyl happened, making it politically impossible to build any new reactors for many years afterwards.

So they were put on indefinite hold, but by now there was no longer time to avoid widespread shortfalls in electricity supply by going back to coal, plus by then the UK coal industry no longer existed, and we'd have been hostage to the international markets anyway. It was at that point that the decision was made to go with cheap and relatively quick to build gas-fired generators, which could be fuelled with North Sea gas.

Just one problem with that - when North Sea gas came on stream, we were told that we had 2-300 hundred years supply. But that was assuming it was used the way it was in the 70s, for mainly domestic and some industrial use only. There were no gas-fired electricity generators back then. Using it for powergen has resulted in that 300 year potential being reduced to more like 30 years, and the UK is no longer self-sufficient. Scotland would be, but not the UK.

In addition to that, the whole system has since been privatised. Also by Thatcher's government. Private companies have not found it to be in their shareholders' interests to hold supplies in reserve for extreme weather events such as the one currently being experienced. In times when demand is lower, like summer, they don't accumulate stockpiles, they sell it on the international market. Remember gasometers? Those big things you used to see on city skylines, that went up and down on periodically, and held gas reserves? Don't see those any more, do you? Plus there was a single facility known as Rough off the Yorkshire coast that represented around 70% of the UK's storage capacity. It was ageing, built in 1985, and needed a thorough refurbishment, but Centrica, the owners of British Gas, decided it was too expensive and got out of the contract that required them to do all necessary maintenance work, so they could just shut it down instead, with no alternative provision. Just like they worm their way out of every major powergen infrastructure investment that's ever needed. The private sector does not build power stations. They are happy enough to buy them cheap once the public purse has built them, and run them into the ground, but they have never built one with their own money!

That is the truth that today's Tories will never tell you, but you can check for yourself, they haven't. When they have built anything at all, it has been with government grants and subsidies. Back in the early 80s, when I first studied economics, we used to call utilities like gas and electricity 'natural monopolies,' which obviously had to be publicly owned, because they were essential services and therefore too vulnerable to exploitation if they were in private hands. The argument goes that companies (and remember, economics 101, the purpose of a company is to maximise profit), would find the temptation to profiteer from essential services too great to resist. Then along came Thatcher and said, "No, no, no, we'll open them up to competition and prices will go down!" Well? Have they? Are you enjoying the savings? No, of course you're not! My mother, an 83 year old pensioner on supposedly the lowest tariff, got a bill for over 900 quid at the end of last year!

Prices have skyrocketed, as those of us who actually understood the first thing about economics always knew they inevitably would. The system we have now has competition, yes, but what it also has is two levels of private enterprise, in both generation and distribution, sucking money out of the system to give to their shareholders. How was that ever going to result in lower prices? You'd have to be an idiot or a liar to suggest such an obvious nonsense. Now, I don't think Margaret Thatcher was an idiot. She must have known what she was doing, and that makes it fraud, on a massive scale. It's quite clear. Google the Fraud Act if you have the time. Privatisation ticks every box, and the only valid defence for anyone involved in it would be to claim that they were too stupid to understand what the inevitable results of what they were doing were. So that's the question modern day Tories and advocates of so-called market solutions must answer - are you too stupid and incompetent, or too crooked to be in charge of a petty cash tin, never mind a major economy? Because it has to be one or the other.

To use Thatcher's favourite phrase, there is no alternative!