History of electricity system

Initially, electricity networks were developed independently in towns and cities, sometimes by the local government, sometimes by enterprising wealthy individuals, and so were a mixture of private and publicly owned local systems. These were electrically separate.  In some cases this provided a substantial income to local governments.

From 1926 to 1933, the national electricity grid was constructed, connecting the local grids, and requiring standardisation of voltages and frequency. The 1947 Energy Act led to the nationalisation of the energy system as a whole, and the creation of the Central Electricity Generating Board, which was responsible for all electricity system activities including generation, transmission, distribution, balancing, and supply.

From 1979 there was a shift towards privatization, liberalization and deregulation, creating an energy market, and the basic energy system structure that we have today. The privatisation process involved splitting the single national system into separate parts, called ‘unbundling’. The idea was to create a competitive market based system, although there are limits to the extent to which this can be achieved.

Generation, transmission, distribution and supply became separate licensed activities. In electricity, the generation and supply roles are oligopolistic competitive markets, dominated by a few large companies. The transmission role is a national monopoly, and the distribution role is a regional monopoly, with a single company operating in each geographical area. See section on organisations and ownership for more detail on current organisational structures. 

Gas network history

Gas networks were originally devleoped to carry ‘town gas’, a form of methane made synthetically from coal. When natural gas was discovered in the North Sea, gas networks were converted to carry natural gas. This involved changing the burners in all the boilers in people’s houses so that they could burn a different fuel.

This technology change is being used as a comparison by proponents of hydrogen systems, as it would take a similar effort to convert everyone’s boilers to burn hydrogen instead of natural gas. Hydrogen is non-polluting where it is burned, although there may be pollution involved in producing it in the first place.