I bow to no man in my scorn for the way in which publicly-owned monopolies conduct themselves, having had detailed exposure to the workings of the old British Gas and CEGB, and still recalling the commercial bruises received at their hands. One suspects that Labour's manifesto commitment to put the electricity distribution networks into the hands of local authorities and "open & democratic communities" played its part in crushing their hopes with voters, who also have views on the matter.
That said, open markets and natural monopolies need appropriate regulation; and this is never more true than in the electricity sector, being both enormously complex and absolutely life-and-death vital. FWIW, my broad assessment is that Ofgem does a pretty fair job, albeit with some notable lapses(1); and that under the auspices of Ofgem (and Offer which preceded it), the National Grid and its various organs are pretty competent organisations(2).
Which brings us to last August's power cuts, and this month's official reports on the same. The Grid is undergoing a lengthy period of forced evolution to accommodate the very new paradigm of "low-carbon" generation and its fundamental ramifications: and we're not to be surprised when it gets things wrong at the margins.
Still, the final reports on the power cuts (published at the end of last week), from Ofgem and the Energy Emergencies Executive Committee (E3C), contain more than just fascinating technical stuff. It's pretty clear that not only the high-profile bad actors (Ørsted, RWE and a couple of the Distribution operators, all of whom have been invited to make £££ in "voluntary redress contributions") have been at fault here. A unspecified number of players who should have been quicker off the mark with technical responses to the situation - because they are paid good money to be quick off the mark - were also delinquent.
Ofgem needs to be all over this, and redeem itself for some shocking recent failings(1). Open markets are always the way to go wherever possible: but everyone is prone to getting lazy & cutting corners when things are quiet ... but that's exactly when you need to fix the roof. The periodic sound of the cracking of the whip should be what ensures things never stay quiet for long.
(1) By the standards of, e.g., other Eu energy regulators, Ofgem and the whole UK regulatory system is first-rate - and widely regarded as such overseas. But that's not setting the bar as high as it needs to be. Serious power cuts such as August's are proof enough: and the multiple recent failures among small energy suppliers are a genuine indictment (maybe more on this in another post). Ofgem truly lost the plot on that one: "taking the eye off the ball" doesn't go nearly far enough as a critique.
(2) My big beef against National Grid is perhaps more fairly levelled at government, which has legislated to give them a guaranteed return on "necessary" capital investments. This incentivises Grid to endorse all manner of crazy "green" plans, because accommodating these schemes requires capex! Again, Ofgem is supposed to be the hand on the tiller steering them away from costly nonsense, which is charged to us all.