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London - Powercut


Craig
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Sunday Times

Consumers are now facing the twin threats of a lack of generating capacity and under- investment in the transmission grid. This month, one of Britain’s biggest generators, Powergen, warned of regular blackouts unless the government stepped in to bail out ailing companies. Producers are now seeking government money to restore the spare generating capacity needed to meet peak demand experienced in winter or a heatwave.

The electricity industry, however, is split over how to fund the investment. Ofgem last week hit back hard at companies, accusing them of “crying wolf” with threats of power cuts, possibly as a tactic to get money from the government.

A senior source said: “It is perfectly predictable that they want government subsidies. What business would not? But we can’t see any case for it whatsoever. We have never heard a convincing argument and the market is operating just as it should. There is no reason for any blackouts this winter or any time. We do have some suspicions that there may be some anti-competitive behaviour, some collusion, and we are watching these companies very carefully.”

Ofgem has warned National Grid Transco, the firm responsible for last week’s power cuts — and owner of one of the companies involved in the New York blackout — that it would fine it up to 10% of its annual turnover if it were found to have neglected its duties

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