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The Privatisation Of The Uk El - Online Term Paper

The Privatisation Of The Uk El


Since the privatisation of the British electricity industry in the early 1990’s the power industry has gone through major structural changes. As with most privatisation of former public companies, (such as the privatisation of British Telecom and British Gas), the government wished to see increased efficiency in the production of electricity.
By privatising, the government hoped that the incentive of higher profits would act as a reward for efficiency, meaning that more effort would be made in research and development of new techniques so as to make production more efficient. In order to pass savings onto the consumer, the electricity companies would have to work under certain ...

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monopoly ran from the 1960’s until the first step to privatisation in 1990. This stage on the road to privatisation was to introduce competition in direct supply for customers with over 1MW in demand (around 5000 sites), thus introducing the idea of competition into the industry, allowing a small proportion of the market to be run to a certain extent by the market mechanism.

In 1994 the threshold level above which competition was allowed was reduced to 100kW which added another 50000 customers to the competitive industry, meaning that approximately half of all demand for electricity was subject to competition.

By 1995 the regional electricity companies were in full existence and were in the position of having a private monopoly in their particular region, especially as the regional companies were now able to sell to larger markets as the companies had now become the sole providers of electricity in their own particular areas. This effectively meant that in a particular ...

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in the introduction to the coursework. Initially, before privatisation, the electricity market was a public monopoly which meant that although it had all of the features of a monopoly it was controlled and owned by the government and thus it was intended to provide the best price for the consumer. However, the idea of privatising the industry was that the extra competition found in the market would allow the consumer to see a further fall in price, particularly as the competition should have increased finance of research and development and therefore increased efficiency in the market.
However as competition in direct supply between the regional electricity boards in all areas ...

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PAPER DETAILS
Added: 8/26/2005 12:43:51 AM
Category: Miscellaneous
Type: Free Paper
Words: 4603
Pages: 17

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