Liberalisation and Competition in UK Energy Markets: the Spur to Innovate

This article assesses the main issues for the energy industry over the next decade, and particularly for the British gas industry. Supporting a carbon tax as a way of counteracting market trends towards lower energy prices, the author argues that the agreements at the Kyoto summit will lead, within a decade, to "an effective framework for restricting greenhouse gases". He welcomes the British Government’s recent consultative document on utility regulation and calls for the gas industry to provide serious analysis to allay concerns about diversity of supply in Britain. He foresees accelerating liberalisation in the EU, based not on central agreement but on a Jeffersonian process whereby regulatory changes in one EU state lead to pressure for similar changes in neighbouring states. He concludes by speculating about the energy industry’s equivalent of the PC or mobile phone.