University of California Energy Institute

PWP-060

England and Wales - A Competitive Electricity Market?

Richard Green (Cambridge)

The British sometimes exaggerate their own importance.  For example, we claim that the electricity market introduced in April 1990 was the first of its kind in the world, neglecting the Chilean reforms of 1978.  Another boast is that Britain will be the first country in the world to give all of its domestic electricity consumers a choice of where to buy their power: a boast which many Norwegians know to be wrong.  They have been able to switch supplier (for a fee) since 1995, and the switching fee was abolished in 1997.  Although some of our claims for priority are exaggerated, there is no denying that the overall package of measures that was introduced in 1990 was substantial, and did go beyond what many people thought would be possible.  The existing generation and transmission board was broken up, generators were allowed free entry to the industry, and customers were promised a choice of supplier; if not immediately, then by 1998.  Most of the industry was privatised.  The aim was to create a competitive electricity industry.  I want to ask if that aim has been realised.