Power for the People or Profit for the Few?

The changes to the increasing complicated electricity market and the domination of electricity supply by a few big companies brings into question whether the UKs energy policy is being designed to help those big companies of the consumers and tax payers.

Ownership or control of energy supply has always been a major source of power and wealth – from how owns the mill to oil barons and wars in the Middle East. This along with climate change makes the energy one of the most important issues both nationally and internationally.

On a national level the big power companies are ‘too big to fail’ (hence the government support for British Energy/EDF since 20021). The big energy companies know this and they have enormous influence on our national energy policy2.

In the United States it is known that large power companies have deliberately cut  supply to push up electricity supplies to push up prices3 causing widespread blackouts. Other companies have also manipulated energy prices4 and now Barclays Bank is in the process of being fined $470million5 (about the same as its fine for manipulating LIBOR6) for manipulating energy markets.

Of course these examples are in the USA and I am sure nothing like that happens in the UK although it is suspected that this has happend in the the past8.

Also see reference 8 if you want a more detailed account of how the electricity market is structured in the UK.

 


1 The Economics of Nuclear Energy – British Energy History (http://www.plux.co.uk/the-economics-of-nuclear-energy-british-energy-history/)

2 Energy companies have lent more than 50 staff to government departments, The Guardian, Monday 5 December 2011 (http://www.guardian.co.uk/business/2011/dec/05/energy-companies-lend-staff-government)

3 Tapes: Enron plotted to shut down power plant, CNN 2005 (http://edition.cnn.com/2005/US/02/03/enron.tapes/)

4 FERC settlement with Constellation largest since 2005, Reuters March 2012 (http://www.reuters.com/article/2012/03/12/us-utilities-constellation-ferc-idUSBRE82B1E120120312)

5Barclays case shocks the energy market, Financial Times November 2012 (http://www.ft.com/cms/s/0/8368a0be-2434-11e2-9509-00144feabdc0.html#axzz2BFSX6GTi)

6 Barclays fined for attempts to manipulate Libor rates, BBC 2012 (http://www.bbc.co.uk/news/business-18612279)

8 The changing face of the Electricity Markets in the UK, N. Keith Tovey, School of Environmental Sciences, University of East Anglia (http://www.uea.ac.uk/~e680/cred/neta/NKTovey_Moscow.doc)

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