‘Britain needs an unprecedented expansion of the electricity grid’. So proclaimed the Economist last week. Sadly, the article didn’t contain any historical analysis to substantiate the claim. Even sadder was the lack of curiosity into the period before 1990, and the last ‘Grid Upgrade’ from 1948-1980
Let me try to fill the gap with some economic history…
In the ‘big push’ over the 15 years from 1955-1970 electricity networks were built at a breath-taking pace
1. CAPEX peaked in 1967 at £5.9Bn vs £1.2Bn in 1949; a 373% increase in just 15 years
2. Average CAPEX per year was £4.0Bn (£1.1Bn in transmission, and £2.9Bn in distribution in today prices)… that is much lower than BEIS modelling of £5.6Bn to £8.5Bn of CAPEX per annum to reach net zero. And that is just the onshore networks
3. But the CAPEX in the 1950s-1970s bought a heck of a lot of network! Between 1955-1970 the length of network grew 55%, or a 3.1% compound annual growth rate. The growth rate was ludicrously high for the 132kv, 275kv and 400kv network
4. It seems like CAPEX had more bang for buck in the 1950s-1970s…. For comparison with our future, the 2020 BEIS modelling estimated a 0.8% to 1.9% compound annual growth rate in the length of the 132kv and below network from 2020-2050… costing about £2.2Bn to £4.6Bn of CAPEX per annum.