Electricity sector strategy 2012-15

Sector description

• The sector comprises those involved in electricity:
  • Generation (conventional and renewable)
  • Transmission
  • Distribution (licence and unlicenced networks)
  • Supply (retail)
• There are six major players (EDF, RWE npower, E.ON, Scottish and Southern Energy (SSE), ScottishPower and Centrica) that operate across two or more of the four subsectors and account for 60% of total employment in the industry
• Other notable players include National Grid who are responsible for electricity transmission in England and Wales
• Of the 35 major companies in the industry it is estimated that 22% employ less than 50 staff, 61% employ more than 500 staff and 17% employ more than 5000 staff
• Around 87,000 workers - about a third of which may be contractors

The strategy excludes the nuclear and micro-generation sectors. Further, it does not address risks to those working in other sectors that may encounter electrical hazards, eg interfaces with electricity supply infrastructure in industries such as construction or agriculture.

Key stakeholders

Regulatory bodies and government (eg HSE, Ofgem, DECC and the Environment Agency).

Trade / industry bodies, including the Energy Networks Association (ENA), Energy UK, RenewableUK, Renewable Energy Association (REA), Energy & Utility Skills (EU Skills) and the National Skills Academy for Power. Specifically:

• National Health and Safety Advisory Committee (National HESAC) - an influential tripartite forum for the transmission / distribution and conventional generation sector with representatives from member companies of ENA, Energy UK, the industry's Trade Unions (GMB, Prospect, Unison and Unite) and HSE. National HESAC has developed a number of key industry initiatives, such as the SAFELEC 2010 programme, and most recently, Powering Improvement which, in response to The Health and Safety of Great Britain: Be part of the solution, is a five-year strategy aimed to bring about continuous improvement in safety and occupational health in the ENA/Energy UK generation and networks subsectors
• RenewableUK, the trade body for the UK wind and marine renewables industries, has agreed a Health and Safety Strategy (2012–16) with the vision of being a leading enabler in the delivery of an expanding UK wind, wave and tidal sector free of fatalities, injuries and work-related ill health

Safety and health issues

Incident rates of work-related injuries and occupational diseases in this sector are less than in the manufacturing and construction sectors.  The basis for prioritising the electricity supply industry is that of possible future harm to workers and risk of catastrophic incidents in light of a number of common issues / themes that run through each part of the electricity supply industry, notably:

• Plant - ageing assets, new technology uptake
• Processes - proliferation of different working procedures and interfaces between dutyholders
• People - recruitment difficulty, increasing contractorisation, competence for new technologies

Legislation and regulation

Ofgem operates a price control regime and issues licences to distribution network operators (DNOs) and transmission operators (TOs). These licences set requirements on coverage and continuity of supply and set price controls taking into consideration running and capital costs. Safety improvements requiring long-term investment will be accounted for within these costs.

HSE is the health and safety regulator for the bulk of the industry with the exception of offices and call centres where local authorities regulate. There are some specific pieces of regulation relevant to this sector notably the Electricity at Work Regulations and the Electricity Safety, Quality and Continuity Regulations.

The Environment Agency also has a regulatory role in the sector. HSE will work with other regulators to address any conflicting priorities which will have impact upon the health and safety of those who work in the industry.

Strategic regulatory and sector approach

The electricity sector, in terms of overall current health and performance, is considered to be a lower risk sector (see Good Health and Safety, Good for Everyone DWP March 2011). The sector comprises of a number of mature and well-placed intermediaries. Many of these players already have established mechanisms for delivery improvements, such as electricity network and generation industry Powering Improvement initiative.

HSE will support industry in delivering the aims of this strategy through joint working with stakeholders. Whereas general proactive inspection is not justified in this sector, reactive HSE investigation and enforcement will remain. Through the life of the strategy there may be specific exceptions where proactive inspections may be identified as necessary.

Future trends

The challenges facing the industry can be can be summarised as:

New technologies – bringing new hazards / new risks / new skill requirements:

• Rapid move toward a low-carbon economy with associated changes in electricity use and generation
• Recent novel technologies and new risks
• Potential for small-scale catastrophic events with multiple on-site fatalities
• Large-scale infrastructure updating and replacement programme will need workers with the appropriate skills. Recruitment shortfalls in key engineering areas and the age profile of the workforce could see a large loss in these skills through retirement in the near future
• Competence issues are likely to emerge given rapid changes and skills shortages

Old technologies - old hazards / new risks / new skill requirements:

• Existing energy infrastructure – generation and distribution – may be operated beyond its original design life
• Challenges to ensure continued safe operation, eg new maintenance regimes appropriate to the ageing assets – demands for new skills and competency

New entrants and players to the energy sector:

• Emerging energy technologies and huge changes driven partly by government policy / green agenda have already introduced a number of new players in the energy sector
• As well as working with novel technologies / new risks, new entrants may lack utility industry background, experience and knowledge (eg of standards and working practices) and awareness of public as well as worker safety issues
• Competence is a key issue, especially given the number of new players (including potential for many SMEs)
• Managers and workers of new entrants working with new technologies need to work together so information on emerging risks is quickly passed on, and acted on, within the business and across the industry as a whole

Industry fragmentation:

• The arrival of new technologies and new entrants combined with government energy policy has resulted in many new and smaller players, increased subcontracting and fragmentation of supply chains
• Reaching these new and smaller businesses through stakeholders and trade associations could become more challenging
• An increase in workers from non-UK based companies to install and commission the new technologies is also likely
• There will be leadership and design supply chain challenges as design standards and safe working practices require development
• Competence challenges will exist both for those directly employed in the sector and those monitoring the work and competence of contractors

Government energy policy and the regulatory arena:

• This industry is working within a complex and rapidly changing government policy and regulatory arena (economic, environmental and safety issues) - risk of conflicting priorities as the technologies are rolled-out and embedded
• With clear non-safety performance targets to be met there are risks safety could be compromised or be seen as a barrier to reaching these targets. HSE, other government departments and stakeholders need to engage early and ensure we are all conscious of the wider perspective

Aims for 2012-15

Leadership and worker involvement

Organisations learn from their own and others' experience, influence others and set standards so that risks from (a) emerging technologies; and (b) existing technologies (eg being used beyond their original design life), are effectively managed.

Building competence

Employers and workers entering into the sector have the necessary skills and competencies to recognise and mitigate risk, and those already in the sector adequately equip themselves to deal with new risks they face.

Taking a wider perspective

Health and safety is accepted as an integral part of business alongside other regulatory systems and expectations of wider benefits in the move to a sustainable secure and affordable energy economy.

Customising support for SMEs

SME's, who are often key influencers in this sector, take positive and proportionate steps to achieve compliance.