Author: Nicole

The UK’s Electricity Regulator

The UK’s Electricity Regulator

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But the UK has no national energy regulator; its only regulatory body is the National Grid. The UK regulator, the Office of Gas and Coal, operates under a statutory remit that is broadly comparable to a federal agency that’s independent of government. Because the UK has no national energy regulatory body, electricity can be bought and sold anywhere without having to seek permission from the regulator, because the regulator can’t be accused of being too interventionist.

But it’s also important to point out that the UK has never had an electricity regulator. Even during the 20th century when electricity was still regarded as a “public utility”, the government set up a number of regulatory bodies, the first of which was the Electricity Supply Board. The electricity regulator operated according to the principle of “competitive tendering”, which says that when the government was offering a contract, it wasn’t incumbent on the regulator to ensure a certain price was achieved for all bidders – the regulator had to ensure that every bidder was awarded a right to tender. The idea is that if the government gets out of the way, there’s only one way of bidding for a contract, which is to be a little bit worse off than the others.

In the UK, when the government says: “Let’s put in a national grid that will deliver the power at the cheapest price possible,” that is an invitation to private companies to bid.

On 19 September 2015, the Guardian newspaper published a front-page article announcing the planned creation of a new British electricity market. That was followed by a second article on 23 September announcing that the £7bn, 30-year contract to supply electricity from wind energy would be awarded to EDF Energy. These pieces used the word “power” a number of times.

In truth, when the government announced the competition between private companies for the supply of electricity from wind energy, they never contemplated the market as we know it today, with all the players involved in the generation, transmission and distribution of energy to households, businesses and industries. The power you get from a wind turbine is what’s called intermittent, and when the wind is blowing, you can make as much electricity as you want. It’s like a solar panel

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