Principles for the formulation of policy for the Electricity System

House of Commons, old black and white photograph

The 1926 Electricity Act

In 1918 the 'Williamson Report' commissioned by the UK Government stated that the very diverse nature of electricity production (there were not less than 600 electrical power generators in the UK) resulted in the costs to the customer being much greater than would be the case if larger interconnected units were used. The Electricity (Supply) Act 1919 established the five member Electricity Commissioners as regulator. Opposition in the House of Lords meant that the Electricity Commissioners had very little power, so very few improvements could be made.

In 1925, the Cabinet asked Lord Weir to review the position. The Government pushed through the landmark Electricity (Supply) Act 1926, which gave the Electricity Commissioners the powers they needed and established the Central Electricity Board to build and operate the National Grid, and control but not own the power stations.

The Grid, was largely completed by the end of 1935. By 1938 the proportion of spare generating plant had been reduced from 80 per cent to about 15 per cent and the resulting capital saving amounted to 75 per cent of the cost of building the "Grid"; and generation costs fell by 24 per cent.

From 1926 until 1947 when the Electricity System was nationalised, the number of generating stations was reduced to 132; these were owned by a combination of private and municipal bodies.

The arrangements of the 1926 Act for creating a fit for purpopse electricity system were therefore highly effective.