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Bad Timing: U.K. Power Failure Stresses Task Ahead for Johnson

William Mathis, Adam Blenford and Mathew Carr

(Bloomberg) -- Chancellor of the Exchequer Sajid Javid donned a hard hat on Friday and promised to step up investment in infrastructure from transport to digital connectivity. Hours later, just as the Friday evening rush hour was beginning, London and vast swaths of the U.K. went dark as two generators went down.

The country’s largest power outage in years, stretching from Cornwall in the west to the capital in the southeast, affected about 800,000 customers for less than an hour but its effect was widespread. Train services to and from London were crippled, with terminuses turning thousands of people away. Commuters like Martyn Berry, an independent energy consultant, took an Uber to get home.

“Analysts and observers of the energy industry have been saying for the last 10 years that these kind of events will become more frequent, whether it’s the trains not running or the lights not working,” said Berry, who was caught in the delays at St. Pancras rail station. “Events like today’s demonstrate how close to the line we are with the state of current infrastructure.”

For some like Berry, Friday’s episode is an uncomfortable reminder that Britain’s infrastructure is creaking and symbolizes the challenges ahead as the country faces a potentially damaging exit from the European Union. Prime Minister Boris Johnson has pledged to increase investment as part of a wider boost to government spending, leading to speculation he’s gearing up for a snap general election.

Austerity in the aftermath of the financial crisis has left Britain hesitant to fund construction of large-scale new energy infrastructure. Meanwhile high bills for consumers have hurt support for the ruling Conservative Party, which is trying to find a balance between reliable supply and price increases as the country moves away from fossil fuels.

The power failure underlines one of the issues for a grid that draws energy from multiple sources, rather than getting everything just from coal and nuclear. When one source falls off, suddenly the network has to readjust. The cut happened amid stormy weather -- high winds sometimes force windfarms to scale back output.

Even a relative short disruption can cause outages and misery for thousands of people. National Grid said there was a problem with just two generators.

Javid said earlier on Friday that he will publish a National Infrastructure Strategy in the fall. It follows a review that called for investment in electric vehicles and charging points -- which will increase demand for electricity -- as well as broadband, tackling floods and cutting waste.

Despite Friday’s disruption, the U.K. has led the world in cutting the need for coal power, replacing it with cleaner gas and offshore wind generation. It plans to eliminate the need for coal by 2025. A government assessment from November concluded the electricity network was reliable, yet required continued investment to meet the energy transition.

Still, Britain faces a headache about the future of its nuclear power facilities, which supply about 20% of the nation’s energy. Most of the existing plants will need to be shut down in the next decade because of their age.

While Electricite de France SA completed the first part of construction work at the 19.6 billion-pound ($24 billion) Hinkley Point C nuclear power plant project in June, it won’t come on stream for another six years. When operational, it will be able to produce enough energy to supply 6 million homes.

Energy companies are also waiting for signs from the government about how the post-Brexit relationship with the EU will be structured. Natural gas and power are physically interconnected across the English channel, meaning there could be higher prices for consumers if tariffs reemerge.

In the meantime, Britons reacted to the country’s latest hiccup with a mixture of humor and shoulder-shrugging. The hashtag #powercut trended for much of Friday evening, with some on social media musing that the authorities had flicked an on-off switch to reboot the system.

--With assistance from Neil Callanan.

To contact the reporters on this story: William Mathis in London at wmathis2@bloomberg.net;Adam Blenford in London at ablenford@bloomberg.net;Mathew Carr in London at m.carr@bloomberg.net

To contact the editors responsible for this story: David Merritt at dmerritt1@bloomberg.net, James Ludden, Tony Czuczka

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