The United Kingdom Energy Policy

Résumé du document

The United Kingdom energy policy is quite interesting to analyze. Indeed, its model is in crisis. As most of the European countries, the United Kingdom faces many challenges. Talking about the United Kingdom is also an opportunity to wonder whether the privatization of markets on which the State traditionally has a monopoly over is a good thing or not, and to think about possible reforms to improve the current situation. This presentation will mainly focus on electricity generation. In the first part I'll talk about the privatization of the energy sector in the 1980s, then in the second part I'll analyze the influence of the new challenges, and to finish with, I'll show one of the possible solutions to improve the situation.

Extraits

[...] The idea of more nuclear power plants in the United Kingdom has been suggested by Tony Blair in 2005. As you can see on the map, the number of nuclear plants in the world is exploding: while they are 436 currently are already planned or being constructed. Today in the United Kingdom, the quantity of electricity produced by nuclear stations is almost the same as in Belgium of which population is 6 times smaller; and 8 times less electricity is produced by nuclear stations in the United Kingdom than in France whereas they have about the same population. [...]

[...] Rather than investing money in research to develop new technologies, the country has almost entirely relied on foreign countries. But while the United Kingdom's imports are increasing as you can see on the graph, foreign suppliers of gas and oil are less and less reliable and prices are increasing. So today, the United Kingdom energy independence is threatened Dangers of free-market for British companies Finally, the fragmentation put in place by Margaret Thatcher in the 1980s to prevent the market from monopoly has weakened the firms. [...]

[...] So compared with other countries, nuclear has a big potential for growth in the United Kingdom. The question of nuclear is particularly important currently because the nuclear power stations of the country were built in the 1960s and in the 1970s and they are all to close during the next few years. While Angela Merkel announced that the new sustainable technologies were not ready yet, because too expensive and not productive enough, the British Government set up a commission named Future of Nuclear Power”. [...]

[...] For nuclear power stations, which represent a quite expensive investment for most companies, the State should also participate in the funding of such projects. To conclude, the United Kingdom Energy Policy has to take into account new challenges if the country wants to stay independent. As to the protection of the environment, sustainability of development is not just an option anymore. So a balanced and pragmatic solution has to be found. [...]

[...] To prevent the emergence of a private monopoly, the market has been fragmented into several little companies. An independent regulation has also been established: every 5 years, a maximum price is determined by a commission and adopted by the Parliament in a law. This system enables both to maintain low prices for the consumers by preventing excessive increase of the prices, and to improve the productivity of the companies. Indeed, as the companies cannot increase their profits increasing their prices, their only way to make profit is to increase their margin profit increasing their productivity. [...]