Ofgem’s forecast that there is a very good chance this country will experience power cuts from 2015 onwards if additional capacity is not brought on stream, makes me shudder. For it brings back memories of one of my worst experiences in being a managing director.
In January 1974, all industry was put on a compulsory three day week. We were not allowed to work for more than eight hours in any one of these days, and this period lasted for three months until the end of March. West Midlands industry was badly hit. In those days, manufacturing was in full swing. Like most other factories, we had full order books, with customers screaming for product, yet our workshops remained silent for 40 per cent of the normal working week, no overtime being allowed.
Television closed down at 10.30pm, and neon advertising on buildings was forbidden. These were very tough and difficult times, brought about by a coal shortage, that in turn was the result of mineworkers’ industrial action.
The problem today is more complex. Old and “dirty” coal fired power stations have to be closed down under Euro instruction, reducing generating capacity, which at the moment is not being replaced at a speed necessary to prevent shortages.
Government finds itself in severe difficulties. Due to amalgamations by various generating companies, there are very few developers with whom to deal with. The big electricity suppliers have learned from bankers that if you have power (no pun intended), you are in a position to dictate.
At present, EDF, who are responsible for building and bringing on stream Hinkley “C” nuclear station in North Somerset, have cut back on their building plans because there is no agreement between them and government as to both the scale of subsidies, and the ultimate price that EDF require for product. At the moment they are holding out for about double the going rate, but they are in a position to exert pressure.
This £14 billion project is in a state of limbo, and looks like staying that way for some time. On the other hand, Germany is building six more clean coal power stations, so they will not be short of electricity.
I dread power cuts and silent workshops, and just hope that common sense will quickly prevail.
* Russell Luckock is chairman of pressings firm AE Harris
