Leader: Grid’s new chief will have his hands full

What a week for National Grid! From the return of the NISM to the sale of the gas distribution businesses, it hasn’t been out of the headlines since last Tuesday, when Steve Holliday’s departure next year was confirmed and John Pettigrew was revealed as his successor. Pettigrew’s a Griddie through and through, with 25 years’ experience at the organisation under his belt. But he faces an unprecedented set of challenges as he steps up to take the top job. What’s going to be filling up his inbox? We’ve got a few ideas:

1.  Last Wednesday’s notification of insufficient system margin led to some alarmist headlines. Once a fairly common occurrence, a NISM hasn’t been issued since 2012. As margins tighten, we’ll be seeing more of them. It will be interesting to see whether the second one results in the same hand-wringing as this year’s first. Either way, Pettigrew will want to keep an eye on tightening margins and ensure the organisation can cope when it comes to the (capacity) crunch.

2.  It’s not just the crunch posing problems for Grid’s engineers. The transmission system faces unprecedented challenges: it’s approaching its operational limits for voltage and the inertia in the system is changing, creating issues around frequency control. There are some 20 such deep engineering challenges set out in Grid’s System Operator Framework 2014 – and according to noises coming out of the organisation, the update due at the end of this month will reveal the problems are presenting themselves faster than expected.

3.  It seems fitting that Holliday’s time at National Grid started with the sale of the first tranche of gas networks in 2002, before he become chief executive, and ends with the second, announced this week. The sale will likely be completed on Pettigrew’s watch, and he’ll want to ensure the company realises the value of the businesses, with the cash set to be returned to shareholders. What better way to greet the markets than with a wodge of cash?

4.  Talking of the markets, there’s the perennial “problem” of the US operations. While Grid is now firmly established as a transatlantic utility, its American businesses have never offered the same stellar returns as the UK arm. With experience of running the business in the States, Pettigrew has an opportunity to make his mark here.

5.  As the complexity of the power system increases, new questions about whole system thinking are emerging. Time is running out to answer them, and Pettigrew will be firmly in the hot seat when decisions are taken between industry and government that will shape the power system for decades to come. Read more on page 6.