The Restructuring and Privatization of the U.K. Electricity Supply-Was It Worth It?
The electricity supply industry in England and Wales was under public ownership from 1948 to 1990. For most of this period, the Central Electricity Generating Board (CEGB) operated all generation and transmission as a vertically integrated statutor...
| Main Authors: | , |
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| Format: | Viewpoint |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/1997/09/441280/restructuring-privatization-uk-electricity-supply-worth http://hdl.handle.net/10986/11572 |
| Summary: | The electricity supply industry in
England and Wales was under public ownership from 1948 to
1990. For most of this period, the Central Electricity
Generating Board (CEGB) operated all generation and
transmission as a vertically integrated statutory monopoly.
In 1990, the CEGB was restructured and privatized. This Note
describes how a social cost-benefit analysis is conducted to
assess the worthiness of the exercise and reports the
results. The analysis shows that the effort was worth it.
But there are two areas for improvement in the process of
the restructuring and privatization. First, about a quarter
of the net gains were transferred out of the country. If
more attention had been paid to this possibility at the time
of restructuring, some arrangement could probably have been
found to prevent it. Second, introducing more competition in
generation would have reduced excess entry and lowered
prices, improving the distribution of the net benefits and
increasing social welfare. |
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