Is it a coincidence that London and New York plunged into darkness?

First New York, and now London. And how odd both cities affected by power failures should be the countries which pioneered the privatisation of the power industry.

Ken Livingstone, the Mayor of London, was furious about last night's power failure. "It is so similar to what happened in New York," he said. "We just don't invest in the way the French and Germans do and we suffer because of it. We have lost hundreds of millions of pounds for the economy because we are a 24-hour, seven-day a week city. It makes us look as if we should be a Third World country."

Mark Fairbairn, chief operating officer for National Grid Transco, said the failure was caused by two very rare errors occurring at the same time - "something we can't protect against". Two high-voltage lines have been blamed.

The national grid is like the motorway network, carrying huge amounts of power across the country, while the smaller power companies - the distributors - operate the A and B roads, that reach your home. If the motorway fails, nothing can get home - as was the case for many commuters last night.

But the failure has focused people on the viability of the privatised system.

Professor Ian Fells, who is an adviser to the World Energy Council, said: "Quite simply it shouldn't have happened. It proves the system is frail and it needs more investment."

He said electricity prices have been driven down so much that energy companies were not making profits to invest back into the system and build extra power supplies: "Since we privatised our electricity companies, it's become extremely difficult to get investment in the infrastructure. Chief executives and shareholders need to be paid large amounts of money. The way we distribute electricity has also affected the system and driven prices down - many companies are going bust." National Grid Transco countered that it has invested £3 bn in the network during the past 10 years, as much, it says, as the US has spent on its entire high-voltage network in the same time.

Certainly, the power failures in the US have been blamed convincingly on the privatisation of the electricity companies there, which began in 1992, and the abandonment of various public-service obligations on the companies there - and consequent failures to invest in the system, in favour of investing in the managers' pay packets. But that snowballed from what was firstly a small failure but ended up engulfing 50 million people in eight states along much of the Eastern seaboard.

Interestingly, it was Niagara Mohawk where the problems began in the United States power failure. Niagara Mohawk is owned by National Grid Transco, the privatised company created in 1990 - for Britain, under Margaret Thatcher, was the first country to privatise electricity. Perhaps after leading the way in this field, we are starting to pay the price now.

Comments