The Case for State Intervention in the Electricity Supply Grids Grows

A new report by England’s North East Chamber of Commerce (NECC) has revealed that economic growth in that region is being severely hampered by the profit-driven privatised electricity supply grid.

The NECC’s report revealed that the average transmission charge paid by generators based in the North-East is £9.73 per kilowatt, as opposed to their counterparts in the South-East who pay as little as 25p per kilowatt.

Transmission tariffs are the fees that electricity generators pay for using the National Grid — which is owned by The National Grid Plc, a multinational electricity and gas utility company headquartered in London. It is one of the largest investor-owned energy companies in the world and is listed on the London Stock Exchange and the New York Stock Exchange.

The disparity is caused by the privatised electricity supply companies focussing their investments down in the south east of England, where the short-term larger profits can be made.

The NECC report said that the “unfair” electricity charging setup is preventing millions of pounds of investment from coming to the England’s North East.

The North-South divide is a result of the larger demand for electricity across London and the Home Counties, which, the NECC said, means that companies find it more profitable to build power plants close to the capital.

Mark Stephenson, policy adviser at NECC, was quoted as saying that he knew from his own experience that “there have been businesses keen to invest in the Tees Valley, who have gone elsewhere because of transmission costs.

“We have generators across the Tees Valley facing monstrous transmission costs, running in to the tens of millions of pounds, before they even generate a single watt of electricity.

“It is unfair and not practical to continue in this way. If we have any chance of re-balancing sustainable economic growth away from the South-East towards the regions then we have got to make sure areas like ours don’t have extra burdens like this placed upon their shoulders,” Mr Stephenson said.

While it is probably not practical, or even economically sensible, to take state control of the nation’s infrastructure, it is clear that wholesale unbridled privatisation has led to the sort of distortion about which the NECC is now complaining.

It is also short sighted to cripple one part of the country’s economic development in this way. In this regard, some form of state intervention appears to the only fair solution.

One thought on “The Case for State Intervention in the Electricity Supply Grids Grows

  1. The only way to give equal charges across the nation is to nationalise the quick-profit driven electricity supply grid. Personally I would also extend this to the water and electricity supply companies, not one of which of any size is now British owned.

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