If a mild foggy night causes trouble for the UK National Grid….?

Last night a regular theme of this blog nearly came home to roost and the timing of it showed how vulnerable we have become. By timing I mean that last night the weather was not especially cold as for example according to the Met Office the area around Edinburgh had 3.4 degrees centigrade as its lowest temperature and the London area had a minimum of 7 degrees centigrade. Accordingly domestic heating was far from the peaks we might expect in a British winter. However the National Grid issued the rather ominous acronym NISM.

One of the tools we’re most likely to use in our Electricity National Control Centre at National Grid is called a NISM (Notification of Inadequate System Margin). NISMs are a long-standing part of our toolkit.

Worrying for those who worry about what official denials imply we were also told this.

Issuing a NISM doesn’t mean that we’re moments from a blackout.

Okay so what is it then?

A NISM is a signal to the electricity market that we would like the safety cushion between demand and available supply to be greater. Typically we’ll issue one up to a day ahead of when the extra power is needed.

I will return to the safety cushion later as this is the moot point that has been discussed on here over the past few years. However to the question what happens next there is an official answer.

When we issue a NISM for a future demand peak, generators can respond by making more generation available. They do this by either increasing the available output from generators already expected to be running, or by bringing online additional generators in time for that peak in demand.

The details were that there was an expectation of a shortage of 500 megawatts in the early evening.

Speaking of official denials

Only on Tuesday as in the day before the outgoing Chief Executive of the National Grid told us this according to the Financial Times.

said he was handing over the business in good shape to his successor.

Still perhaps he meant this.

Mr Holliday became chief executive in January 2007, and since then has overseen total shareholder returns of 136 per cent — or 10 per cent a year.

I guess he will consider his departure to be good timing and to be fair it is the UK political establishment which has set the strategy here which has been mostly to imitate an ostrich. Back on the 15th of October I warned that there was as Taylor Swift would put it “trouble,trouble,trouble” ahead and I have added some emphasis.

Oh and the actual National Grid report has just been published and the margin has “Hey Presto” gone to 5.1% which means that we are likely to feel the pain in our wallets as prices rise as more expensive production methods are bought in.

What happened last night?

The Financial Times takes up the story.

The scale of Britain’s energy supply crunch was laid bare on Wednesday as an unexpected outage of power plants sent wholesale electricity prices soaring and prompted the grid operator to call for the first time ever for industry to reduce power.

As someone who recalls his mother buying candles for the 3 day week I am rather dubious about the “first time ever” and as it has issued NISMs before so is the National Grid! However look at the impact which was not via blackouts but via price.

Traders watched in amazement as prices surged, with the grid paying £2,500 per MWh to one operator, Severn Power, as it bought in emergency supplies; the usual going rate is around £60.

Extraordinary! Albeit no doubt that it was an extreme case.

The underlying cause

As we have discussed on here many times before the UK has been decommissioning what are considered these days to be “dirty” power stations which rely on coal. This has been partly to comply with European Union rules and partly because successive governments have wished to apply a green tinge to their actions. However whilst I welcome some of the shift to renewables as for example there have been considerable improvements in solar power there are problems as they are not a like for like replacement. For example solar power does not work in the dark and we know what happens to wind power on a calm day. The UK political establishment seems to have ignored this basic fact.

Until we get a way of storing power the renewables always need a back up and here we get the biggest irony of all. Some industrial plants switch to diesel generators which according to the Volkswagen press release test results are modern,efficient.  and clean. Oh hang on…..

So in essence we pay a premium to switch to methods of power generation which are dirtier and less green than the ones we have scrapped. I note that someone has pointed out that the UK government is planning to purchase the equivalent of 24,000 diesel Volkswagen Golfs.


2015 has been a year of energy price disinflation with central bankers regularly informing us that apart from it they would be “on track”. Indeed if we check the prices I note that coal prices have been falling since 2012 and have fallen around 20% in 2015 so far. The UK has lots of coal but having rejected it there is natural gas where I note that Henry Hub gas futures are below US $2 continuing the same message.

Therefore our incompetent establishment has managed to light the fires of inflation in the UK in a disinflationary environment. “Outstanding” as the drill sergeant in Full Metal Jacket might say. This is part of what I mean when I write about the UK being a nation that has institutionalised inflation. We do not know what this winter will bring as the we may be lucky or unlucky but we are vulnerable.

Mind you as it is “Super Thursday” the Bank of England may be pleased by signs of an inflation rise.

Balance of Payments

In the short-term we import power from different countries such as France and Ireland vis the interconnectors as we drive our balance of payments deficit ever higher. There is an irony in us importing what is effectively French nuclear power partly because we have failed to build news ones of our own. I know that there are “green” arguments against but we have a lot of coal.

The steel crisis

I am fascinated by this in the Financial Times

The problem has been caused in part because electricity prices are too low to provide incentives to suppliers to build new capacity which can be used at short notice, such as gas.

Our steel industry does not seem to think that electricity prices in the UK are too low! I doubt whether many domestic consumers think so either.

What about the credit crunch?

This may be the only time you read this from me but it may in this sense have had a benefit. What do I mean? Well you know all those graphs the Bank of England produces ( at 12.45 pm today for example)? You know the ones where everything would otherwise by much better/higher? So if economic output was much higher we would find the extra power from where……?


In essence this is a failure to plan ahead and goes back to past governments as these are long-term issues over decades as much as years. If we look to South Africa we can see an extreme example of what can happen. From Public Finance International.

It is much darker than usual on Kloof Street in Cape Town, popular for its restaurants, cafés, coffee shops and trendy bars. The street and traffic lights are off, and most restaurants, residences, and shop windows ooze darkness. Somewhere in the background a diesel generator grumbles as a pedestrian walks by, wearing a head torch. ……It is the second power outage in 10 hours.

Worryingly the causes look familiar.

Culprits include substandard long-term planning by Eskom management, lack of investment in and poor maintenance of the grid, dilapidated infrastructure and shortfalls in corporate governance.

Whilst I have little faith in those at the top I am sure that the UK National Grid still has lower down the chain some people who understand electricity supply and are working hard to keep the lights on. But we faced an issue on a mild calm foggy night which poses the question of what we would do if temperatures were lower? As it turned out we did get some wind power as I followed the numbers and it rose to 2% of usage, how lucky were we?

The most likely outcome is that we face higher power bills which is quite an anti-achievement in the current environment! A clear risk is that industry gets turned off which will do what to the “march of the makers” exactly? Lesser so is the prospect of blackouts. As Ian Dury so aptly put it.

What a waste! What a waste!
What a waste! What a waste!

I rather like this reply from Chuffy to the Financial Times.

I think the government need to revisit the fag packet the Department for Energy have been working everything out on for the last 20 years because it appears not to have been entirely correct…


25 thoughts on “If a mild foggy night causes trouble for the UK National Grid….?

  1. Hi Shaun,

    All the essentials in life the Government and EU like to make rare and expensive:

    1. Water especially in the south of the country.
    2. Food through CAP and CFP.
    3. Property through planning laws, local ‘structural development taxes’ and environmental impact assessments.
    4. Energy through anti-plant food policies.
    5. Communications through tardy release of 4g spectrum and massive tax rises of mobile communication radio spectrum.
    6. Seems the only thing they are missing is sex rationing and taxes, but I’m sure they are working on that!

  2. There is a huge area of the mid-Atlantic which has anomalously cold water, and the strongest ENSO event ever.
    These make it much more likely that the second half of winter and early spring, ~ Jan-March, are likely to be colder than average, with the possibility of being much colder than average.
    As that cold is likely to come from an area of high barometric pressure, just as our recent fog did, it is likely that we’ll have the same problem with the generation of power from renewables.
    The two main differences between the 1970s and now are:
    1) Far fewer domestic coal fires to keep people warm if power cuts were to happen, and remember that although your central heating may burn gas or oil, the pumps and ignition are still electric)
    2) People are less public-spirited and are likely to consume more power when the power supply is marginal, making likely cuts definite.

    I have bought a calor gas heater and we have plenty of candles.

    Longannet was shut down because connection charges made it unviable.

    • Hi therrawbuzzin

      Thanks for the links which add to a story I saw earlier about power production being further reduced next spring. I remember last spring we had a discussion on here about a large coal plant which was closing and we concluded we might need it. Sometimes you really couldn’t make it up!

      I do have a chimney and fireplace mostly because my flat is so old so I had better get the chimney cleaned I think and make plans for some firewood. If you weather forecast turns out to be true I may have to bring my mum here as her place is too modern for a fire.

  3. Hello Shaun,

    My first thoughts are for that man who jumped off a 10 storey building as it was the quickest and cheapest route to the ground floor

    Passes 4th floor ” doing alright so far ! ”

    Planning and

    Something all HM governments have achieved so far…..

    Technically all the drawbacks of re-new-ables can be engineered out but at the end of the day it costs ! look at these electricity prices for Europe countries and even after taxes Germany is cheaper? ( cheaper even more if you exclude taxes! )

    We can argue the reasons but mainly its lack of competition since the suppliers were allowed to be generators and visa-versa.

    HMG thinks its because we dont switch enough but dont know why that would reduce my bills when I see a “big club” of energy providers … oh do check regularly and I find quiet often after switching my new supplier a few months later increases their charges !

    As Buzzin said , we’ve been lucky so far with mild winters – a cold snap of two weeks with no wind to speak of ( not as if that’s not happened before ! ) and we will see who has shorts on ( in a snow drift ! )

    And why did we pay for a new expensive nuclear power station when we could have revived our own ? think of £375 billion QE and what that could have done

    Its systemic really,

    no doubt the “Land of hope and glory” boys will come out with their “stiff upper lips” talk ( prob because they are frozen solid )

    Anyways industry will be hit first – bet that will do wonders for the balance of payments !


    PS: It seems the era of $20 oil is not happening yet , $50 is a sticking point but still too low to save a 1/3 of North Sea oil , and what a debarcle that was when compared to Norway’s plan

    Shortermism will come to roost soon I think

    • ‘And why did we pay for a new expensive nuclear power station when we could have revived our own ? think of £375 billion QE and what that could have done ?’

      A great question but I doubt it’s being asked in Westminster Forbin,.

    • Hi Forbin

      On the subject of QE we were told today by Governor Carney that there would be no consideration of changing the £375 billion until Bank Rate hits 2%. So as it has been at 0.5% for nearly 7 years that could be quite a wait! After all he promised they would be higher now. I tried to get a journalist to ask about it via Twitter as the “plan” really is stupid but sadly no-one did.

      As to the press conference if only we had been able to spin the ball in the Test Match even half as much, we would have won.

      • “as the “plan” really is stupid” not if you have no intention of allowing rates to reach the “heady heights” of 2%.

        They should have already been increased in the UK, we now have the beginnings of an inflationary episode due about Spring or Autumn 2017 unless rates are increased in the next 2 months.

  4. Hello Shaun,

    My second thoughts were as we increasingly move towards total de-industrialisation then even the buffer of shutting down the factories will not help

    Anyone remember why Italian chrome was so awful ? that’s because they shut down electricity supplies whilst chroming was going on , and thats never good for the process.

    So we run out of industrial cuts ( no exports ) and the blackout come to the public , then hospitals ( all those des-gens , ever see one working , ever smelt one ? I have , its not pleasant at all , and costs….. filling up the tank regular like … and the noise …)

    expect when it goes tits up to have some polly going about like a headless chicken , blaming the public , the opposition , ISIL , weather men , etc ,etc but never themselves )


  5. Hi Shaun,
    £2500 per MWH? Makes the amount we’ve agreed to pay EDF for the electricity produced at Hinckley C look a bargain!

    • and Germany gives electricity away for free more or less during the day

      be-jesus sell at £2500 MWH out and buy at £0.00 MWH and we still can’t even do that ?

      we deserve to suffer !!


  6. Hi Shaun

    We are an island surrounded by powerful seas allied to numerous sufficiently voluminous rivers – clearly tidal and wave energy ought to be critical, even geo thermal is an option, the trouble is, this energy is effectively safe, free (like solar & wind) &, ostensibly, combined available 24 hours a day but, of course, none of these are geo politically influential (nuclear, hydrocarbons) or, indeed, feed the greed of the upper echelons

    We could and should have been driving electric or hydrogen (for planes maybe marine) generated vehicles by now yet, as mentioned above, too many avaricious interests have left us in this dire position. Inevitably we will all have to be green, either that or revert back to primitive existence following Mad Max scenario

    Enjoy the fireworks

  7. Splendid article and comments; I note that during our little local ‘difficulties’, the public, real-time French Grid site indicated that our gallic neighbours were exporting a mere 7.8 GW to the rest of Europe, including UK. Sometimes central planning works!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.