by Colin Robinson
Institute of Economic Affairs
December 11, 2013
For a short period, around the turn of the millennium, the UK energy market was highly competitive, offering choice to consumers and keeping prices in check. Since then, governments have reverted to centralized action, importing many of the defects of discredited Soviet-style planning. In particular, they effectively control the types of power stations that are built, even though they lack relevant knowledge. Government policy provides a complicated network of administrative actions and subsidies intended to promote non-fossil sources of energy and energy ‘conservation’. It hands out favors to producers of ‘renewable’ energy (wind and biomass) and nuclear power which consumers pay for in their bills. The government’s interventionist approach is also encouraging inappropriate proposals (such as price freezes and windfall taxes) that would have perverse effects and are another step along the road to central control. Less government action and more competition to protect consumers are required.



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