Business
Rewiring Britain for an Era of Clean Energy
In a career spanning more than 30 years, John Pettigrew has seen big changes in the electricity industry. He started out in 1991, working to introduce natural gas-fired power plants to the grid, gradually replacing polluting coal plants. .
Now, once again, he is managing a tectonic shift to an electrified economy that runs on renewable energy like wind and solar power. But these sources of power generation are far trickier to manage than their coal and gas predecessors.
“Effectively, what we’re doing is reconfiguring the whole network,” said Mr. Pettigrew, chief executive of National Grid, which owns and operates the high-voltage electricity grid in England and Wales.
Mr. Pettigrew was emerging from a tunnel nearly 20 miles long that National Grid has bored deep underground at a cost of about 1 billion pounds (about $1.3 billion). The shaft, which workers ride through on bicycles, will carry new cables to feed the power-hungry offices and residential communities of London.
Mr. Pettigrew and his company are in the spotlight these days. The Labour Party government of Prime Minister Keir Starmer, which came to power in July, is taking a close interest in the electric power system, which it sees as a primary vehicle for delivering political and economic goals.
A more robust, versatile grid will be crucial not only for tackling climate change but for securing Britain’s place on the cutting edge of artificial intelligence, which requires vast amounts of power to run data centers.
The government aims for 95 percent of Britain’s electricity to come from what it calls “clean” sources like wind and nuclear by the end of the decade, up from about 60 percent in 2023. At the same time, demand for electric power is expected to surge.
“We haven’t started to think about how seriously we need to invest in our core infrastructures for the resilience of our economy in a digital world,” Dieter Helm, a professor of economic policy at the University of Oxford, said in a recent podcast.
The price tag for an electricity system that can handle such changes is around £40 billion a year from 2025 to 2030, according to the government. National Grid alone has filed documents with regulators to spend as much as £35 billion over five years.
National Grid was founded in 1990 when the Central Electricity Generating Board, which managed the power network in England and Wales, was broken up in an era of privatization. (The company, which is listed in London, also has a large business managing power networks in the United States.) Mr. Pettigrew has run National Grid for nearly a decade, but he may be facing his greatest challenge, industry experts say.
“I think there’s a big question about how can they build rapidly enough all this new infrastructure at the same time as maintaining the same standards,” said Edgar Goddard, a former National Grid executive and now a director of EPNC Energy, a consulting firm.
An electrified economy will require a highly reliable grid for a host of reasons, including national security, analysts say. At the same time, critics of renewable energy say that relying on sources of power like wind and solar, which are by their nature variable, creates new challenges for the system.
On April 2, a parliamentary hearing on the Heathrow outage became a venue for executives from the airport and power companies politely dodging blame. Electricity executives said that there was sufficient power available. Alice Delahunty, National Grid’s president for transmission and a key aide to Mr. Pettigrew, conceded that the fast-changing demands being made of the power system called for a careful rethinking about it’s resilience.
Britain’s high-voltage network, like those of other countries, used to be relatively simple, bringing electricity from large generating plants — often near where the coal burned in them was mined — to London and other cities.
Now Mr. Pettigrew is extending National Grid’s tentacles toward the coasts, sometimes through scenic areas, to capture new sources of electricity like the giant offshore wind farms now being built in the North Sea.
He also must make sure the system can carry a lot more power.
Demand for electricity, which has been sluggish in recent years, is expected to double in the coming decades as more drivers take the wheel of electric vehicles and data centers spring up to handle everything from financial services to artificial intelligence.
There is already a long line of wind farms, battery storage facilities and data centers waiting to hook up to the grid — sometimes with increasing frustration. “Their connections process is very poor,” James Basden, a founder of a power storage company called Zenobe Energy, said about the large power operators.
A small industry has sprung up to advise companies on how to navigate the gauntlet of securing access to the grid. “We’re seeing huge demand,” said Simon Gallagher, managing director of UK Network Services, one of those firms.
The government is betting that installing swaths of wind turbines — both on land and in the seas off Britain’s coasts — as well as thousands of miles of high-voltage cables will attract investment, nurture clean tech jobs and reduce the country’s vulnerability to price swings in energy like those that occurred after Russia’s 2022 invasion of Ukraine that led to reduced supplies of natural gas.
Since that invasion, high energy costs have been a major issue in Britain and across Europe, where governments have been forced to spend heavily to help households pay their bills.
Some analysts, though, say the huge costs of installing a new energy system may at least partly cancel out the low running costs of wind and solar. “There’s a lot of infrastructure that needs to be built and that’s going to be paid either by taxes or electricity prices,” said Chris Wilkinson, a senior analyst at Rystad Energy, a consulting firm.
Much is at stake for Britain and the wider clean energy industry. If the government’s ambitions prove unrealistic, that could be a blow to the industry, which is already under fire from the Trump administration in the United States.
It certainly won’t be easy to rewire Britain. National Grid is working on 17 large power projects. Some of the schemes involve laying cables for miles offshore to transfer electricity from clusters of wind farms planned for Scottish waters to consumers in England.
Others involve new power lines marching through rural areas on enormous pylons — a prospect that riles up local residents against both the government and National Grid.
The government is taking advantage of its large majority in Parliament to push through legislation curbing the options of opponents of power projects to pursue what it recently called “meritless cases” in court. The government is also planning to offer up to £2500 in compensation over 10 years to people living near the new pylons.
It often takes many years to push projects through the planning system in Britain. Mr. Pettigrew says that process needs to speed up so that Britain can meet its green energy goals.
To achieve anything close to the government’s targets will require an abrupt change in Britain’s leisurely pace of building infrastructure. Offshore wind capacity, for instance, will need to roughly triple. To bring this clean power to consumers will require adding around 3,400 miles of new power lines to the grid, about twice as much as was constructed in the previous decade.
“The way I would describe it is that everybody has to play their part perfectly over the next five years,” Mr. Pettigrew said.
Both peanut butter and salary increases are widely loved, but put them together and you may get some grumbles.
“Peanut butter raises” are across-the-board pay bumps to employees, spread out thinly like a creamy condiment on bread. The term popped up all over business media this year after a report from Payscale, a compensation data company, suggested that some employers would be giving such raises instead of larger merit-based increases to a select few.
This metaphorical use of peanut butter has been lurking around corporate America for years: In 2006, Brad Garlinghouse, then a senior vice president at Yahoo, wrote an infamous memo criticizing the company’s strategy of “spreading peanut butter across the myriad opportunities that continue to evolve in the online world” — in his view, failing to focus on priorities or reward top performers with higher pay. “I hate peanut butter. We all should,” he wrote in what he called the Peanut Butter Manifesto.
How it’s pronounced
/pē-nət bə-tər/
Are peanut butter raises fair? It depends on whom you ask, said Nick Bloom, an economist at Stanford. Are they a best practice? Not really, he argued.
“Good management involves setting tough targets, evaluating employees against this and rewarding those that make their targets,” Mr. Bloom wrote in an email. “This means some folks will get paid and others won’t.”
Firms turn to peanut butter raises in two situations: when they can’t really distinguish strong performers from weak and when managers just want to take “the course of least resistance,” Mr. Bloom said. Generally, he added, a well-managed firm will pay its top performers well and keep an eye on the market.
Kevin J. Murphy, an expert on compensation at the University of Southern California’s business school, argued that peanut butter raises “send exactly the wrong signals,” telling top performers that their employers “just don’t care that much.”
Still, the idea that only stars should get pay bumps is not a law of physics. In previous generations, the notion that people across an organization — not just the top performers — should get consistent raises was common, said Peter Cappelli, a professor at the Wharton School.
But, he said, “that has changed over time,” starting in the winner-take-all, Jack Welch management era. Lately, executives who see themselves as top performers deserving high pay apply that framework to their employees.
Mr. Cappelli is skeptical that peanut butter raises will be a new norm in corporations — they actually strike him as a more generous approach than leaders are likely to take right now. In a tight job market, employers felt pressure to give everyone a little something, he said, but now, in a low-fire, low-hire job market, so few openings are available that bosses are not too worried that employees will quit to go elsewhere.
“Efforts to retain people have faded,” he said. Even peanut butter may be more than some should expect.
Framing raises around peanut butter “takes away some of the seriousness” of discussions about compensation, Mr. Murphy said. Peanut butter is cheap and ubiquitous. It is also associated with children, Mr. Cappelli noted, so it reads as a pejorative in a business setting. It’s not as though executives, he added, are referring to Grey Poupon or caviar raises.
Business
Sweeping California law on single-use plastic meets with outrage from all sides as it goes live
Within days of California’s long-anticipated single-use plastic law going into effect, environmentalists, anti-waste activists and the packaging industry reacted with anger and frustration.
Anti-plastic activists say Gov. Gavin Newsom’s administration and CalRecycle inserted exemptions favoring the plastic industry into the law’s regulations that weaken it and undermine legislative intent.
“These new rules create huge loopholes for plastic packaging that violate the law,” said Avinash Kar, senior director of the toxics program at the Natural Resources Defense Council.
On the other side, the packaging industry has sued over similar laws in other states. “Our members have real concerns about cost, compliance, and constitutionality,” said Matt Clarke, spokesman for the National Assn. of Wholesaler-Distributors, which sued Oregon earlier this year over a similar waste law.
CalRecycle, the state’s waste agency, did not respond in time for publication. The final regulations putting the law into effect were released May 1 and posted for review Tuesday.
The environmental organizations say the law’s new final regulations open the door to what is known as “chemical recycling,” which produces large amounts of hazardous waste. The law also contains problematic exemptions for certain categories of plastic foodware, they say.
The language of the law forbids any kind of recycling that would produce significant amounts of hazardous waste. The new regulations allow for these recycling methods if the facilities are properly permitted.
The new regulations also exempt certain products if they are already covered by federal law. For instance, a packaging company, retailer or distributor can claim that they have such a preemption, Kar said, and CalRecycle might not immediately review that claim. “And as long as they don’t review it, they’ll get the exemption for as long as CalRecycle doesn’t review it,” creating a potential “forever loophole.”
“Californians were promised a system where producers take real responsibility for the waste they create,” said Nick Lapis, advocacy director for Californians Against Waste. “When regulations introduce broad exemptions and redefine key terms, that promise starts to erode. The details matter here, and right now they don’t line up with the intent of the law.”
Senate Bill 54, the Plastic Pollution Prevention and Packaging Producer Responsibility Act, was signed by Newsom in 2022. It was considered landmark legislation because it addressed the scourge of single-use plastics, requiring plastic and packaging companies to use less of them and ensuring that by 2032, all food packaging is either recyclable or compostable.
Accumulating plastic waste is overwhelming waterways and oceans, sickening marine life and threatening human health.
The law’s intent was not only to reduce it, but also to put the onus and cost of dealing with it on packaging producers and manufacturers, not consumers and local governments. It was supposed to incentivize companies to consider the fate of their products and spur innovation in material redesign.
According to one state analysis, 2.9 million tons of single-use plastic and 171.4 billion single-use plastic components were sold, offered for sale, or distributed during 2023 in California.
Similar laws have been passed in Maine, Oregon, Colorado, Minnesota, Maryland and Washington. Oregon’s law, however, is on hold while a lawsuit by the National Assn. of Wholesaler-Distributors works its way through the courts.
“We see a lot of the same problems in California that we flagged in Oregon,” said Clarke, the trade group spokesman. “Given California’s scale, the cost implications are going to be even larger. Our legal counsel has noted that California’s proposed fees are already higher than what other states have put forward.”
Jan Dell of Last Beach Cleanup, an anti-plastic waste group based in Laguna Beach, doesn’t believe the law will work — irrespective of the final regulations — and said the “exorbitant” cost of its implementation will either spur producers to sue, or they’ll end up passing the higher costs on to consumers.
She referred to a report from the Circular Action Alliance, the state-sanctioned group established to represent and oversee the implementation of the law on behalf of the plastic and packaging industry. It finds the law will increase the cost of disposal between six and 14 times for common products, such as Windex bottles, made of polyethylene terephthalate.
“If the producers don’t successfully sue to stop the fees, this will certainly add to product inflation for CA consumers,” she said in an email. “Californians already have to pay exorbitantly high curbside collection fees for trash, recycling, and organics … so, starting in 2027, our groceries will cost a LOT more but we won’t see a reduction in our waste bills.”
Christopher “Smitty” Smith, a partner at law firm Saul Ewing in Los Angeles, who councils companies and interest groups on SB 54 and other Extended Producer Liability laws, said that although he could see areas of the law that “could be sharper and avoid the legal challenges … you can’t stop people from suing.” Environmentalists and anti-waste activists say they are preparing a lawsuit.
Smith said the law already has sparked changes in how companies think and respond to concerns about waste.
One of his national fast-food chain clients has realized that if its brand name is on plastic packaging, it’s that company’s responsibility, he said, so “they’ve spent the past year mapping out their franchise agreements, their supply chain agreements, their producer agreements, to figure out” what it needs to do to comply.
He said in the past, companies have paid little attention to these details and just let their franchisees figure this kind of thing out. Now, they’re spending a lot of time and money “to wrap their arms around what their supply chain looks like and like, what post consumer use of their plastic products looks like and what their regulatory obligations are.”
It’s bringing a new dialogue within companies. And that, Smith said, is what could make this law so powerful.
Times staff writer Meg Tanaka contributed to this report.
At Gap’s headquarters in San Francisco, an archive dedicated to the apparel company’s 57-year history features nearly 6,000 boxes of memorabilia documenting the retailer’s brands, which also include Old Navy, Banana Republic and Athleta.
There are prints from photographers like Annie Leibovitz and material related to many celebrity ad campaigns, like Missy Elliott and Madonna for Gap and Cindy Crawford for Old Navy. Those dated back to the retailer’s heyday, when malls were full, celebrities wore the brand on red carpets and Gap stores were plot points in sitcoms like “Seinfeld.”
When Richard Dickson started as Gap’s chief executive nearly three years ago, he was awed by those archives and set out to change the conversation about the company.
Gap had spent years closing hundreds of stores across the United States, as sales flagged and profits were patchy. Its stock, which peaked in 2000, was languishing. The company took more than a year to fill the C.E.O. position.
Mr. Dickson, who spent nearly 20 years at Mattel, brought with him a playbook that had helped revitalize the toymaker’s brands like Hot Wheels and Barbie. He got Barbie to the big screen, with star power and a marketing machine that produced blockbuster financial results.
The native New Yorker speaks excitedly about the ways that fashion, entertainment and music are intertwined. He went to Coachella last month and has been to the Oscars in recent years. He often mentions how Gap’s first store, which opened in 1969 in San Francisco, sold records, tapes and jeans.
Mr. Dickson’s culture-focused strategy is taking root. For his creative director, he hired Zac Posen, who dressed Kendall Jenner in a Gap gown for the recent Met Gala. Gap has made toe-tapping ads featuring Katseye and Parker Posey. Mr. Dickson even hired another C.E.O. — a chief entertainment officer — to oversee the company’s push into content, licensing and Hollywood.
Gap’s comparable sales have risen for eight straight quarters, and its market value has increased to $8.5 billion, from $3.6 billion when Mr. Dickson started. Last year, Gap, Old Navy and Banana Republic posted sales increases, with only Athleta recording a decline. Gap’s namesake brand showed the strongest growth.
Mr. Dickson, 58, credits the turnaround to “being aware of pop culture, content, art, theater, music, entertainment.” If a brand makes sure that those themes come through, “you become more relevant,” he said.
This interview was edited and condensed.
As you try to bring Gap back into the cultural conversation, how are you managing your time? Are you spending more time in Hollywood?
As our business evolves, my allocated time also changes.
When I first got to the company, we were in “fix mode.” It’s no secret. My time was 100 percent spent on the operations, the financial rigor, setting up strategic priorities and editing a lot of the noise in the system that can be very distracting for a turnaround.
Over the course of three years, we’ve emerged a better company. Now we move into the next phase, which is to build momentum. My focus, while not taking my eye off the operational discipline, moves more into how to accelerate our growth.
I have a multitude of meetings and time spent with the entertainment community, which I’m very familiar with from previous roles.
When you were hired from Mattel, the chatter was that you would try to recreate the Barbie magic. Is that true, or is there a different strategy for Gap?
It’s actually the same playbook. It is not so much that the playbook is unique; it’s the methodology and the execution that’s unique.
The playbook is, first, identifying what’s our reason for being.
You could put me on any brand in the world. Why do you exist? What is our purpose? What’s our point of difference? Those simple questions have very complicated answers when you’re in a turnaround. If you can’t answer it in a sentence or two, or one or two words, you’ve got a problem.
Old Navy is different from Gap. Gap is different from Banana. Banana is different from Athleta.
So let’s focus on Gap. What makes it distinctive?
When I look at the history of every one of our brands — it wasn’t dissimilar to the Barbie conversation — what was it that broke through? What was that single thing that made it so incredibly relevant?
In our case, it was a store that was all-inclusive before inclusivity became a word, because we sold jeans for all races, all sizes, all sexes. We bridged the generation gap in the experience through music. Music was the connective tissue in the context of the store experience.
Let’s get back into that music narrative with great product storytelling and amplify it in a way that is relevant for today’s consumer. We started with Jungle with our linen campaign. We moved to Troye Sivan with a great music video around the baggy and loose trend. Then, of course, the blowout with Katseye.
These aren’t ads. Yes, you see the fleece because it looks incredible. But nobody’s saying, “Oh, my God, it’s a great deal with a great price.” They’re saying: “Did you see this? Did you feel this?” That is when you get emotional connection to a brand.
We had become more about price than product. More about stuff, not storytelling.
If you’re focusing on entertainment, how do you measure success?
We have dashboards everywhere. I think we just turned one off when you walked in because our business flashes on an hourly basis on my screens.
We have dashboards that measure brand love, people searching more for our brand and brand attributes that we test and roll out to see how consumers are feeling.
Does the focus on entertainment hedge against all of the uncertainty in the world?
To some extent, in the world that we live in, we should be that great distraction in some cases, that pleasant place that you love to go to. That ultimately makes a brand stronger, to essentially navigate more complex times. There’s always something that we have to worry about.
How worried are you about consumer spending? We’re in California right now. I passed a gas station where it was about $6 per gallon.
That was a good deal.
Most retailers say that consumers remain resilient, but are you prepared for spending levels to drop?
We have a fantastic portfolio that addresses all income cohorts.
We have quality products that should last, in some cases, for generations. You’re buying it for the long haul. But we do recognize that we need frequency: We need to stay fresh. We need to stay new.
There are a lot of businesses that will start to pull back on quality, right? We’re not.
You’re from New York City, right? Tell me about your upbringing.
My parents were both in retail, real estate and fashion. My mom was more on the creative side, and my dad was more on the financial and operations side.
My grandparents were also in fashion and retail. They were Holocaust survivors. My grandmother sewed and had her own line in department stores. My grandfather ran the factory, so they had a small business that did very well. I remember growing up and running around the factory floor.
What’s a piece of advice that you received that you still reflect on today?
Retail is detail. There’s not a single day where everything goes right, but at the end of that day you could still say that it was a great day.
Ultimately you’re firefighting on a minute-to-minute basis. You’re constantly in motion. That sense of detail orientation is probably an attribute that’s carried with me from my earliest days in the industry.
It’s time for the lightning round. What’s on heavy rotation on your music playlist right now?
Who I really like right now is Sombr. I saw him at Coachella.
What’s the last thing you asked A.I.?
To decipher an object that somebody sent me from a museum and I wanted to know which museum it was from.
How often do you check Gap’s stock price?
I probably check it twice a day. I do a morning check and at the end of the day.
When you need to feel most confident, what are you wearing?
I love our hoodies, and not only our fleece hoodies at Gap but Banana Republic’s cashmere hoodie. Depending on the vibe, I would go with a fleece or cashmere hoodie. Then I usually throw on a Banana Republic trucker jacket.
I wear all of our brands. I have worn a few sweatshirts from Athleta.
If you had to explain each of your brands in exactly one word, what would it be? Let’s start with Old Navy.
Family.
Gap?
Individuality.
Banana Republic?
Adventure.
Athleta?
I’m going to go with empowerment.
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