Documents

Letters and Notes

The impact of UK shale gas development on gas prices

At the final Beesley lecture of this year’s series, on reducing the costs of lowering carbon emissions, an old chestnut of an economic argument was raised, to the effect that UK shale gas production, even if it starts to happen in the relatively near future, “will not affect UK prices for many years to come because it will not be marginal supply for a long time yet.”
The context here is an interesting one: the main thesis of the lecture was that current policies of providing subsidies to favoured technologies had foreclosing or excluding effect on alternative approaches to decarbonisation, and that part of the exclusionary effect occurred by way of attempts to prevent the development of lines of analysis and reasoning that threatened the privileged policy narratives.

December 1, 2013

Documents

STREAMLINING REGULATORY AND COMPETITION APPEALS

In 2012, supported by a secretariat at the Commonwealth Department of Resources, Energy and
Tourism and by Dr Chris Decker, then of the Regulatory Policy Institute, Oxford, we conducted a
review for the Australian federal and state governments of the Limited Merits Review regime (the
“LMR”) in Australia for appeals of energy network decisions made by the relevant regulator. The
LMR regime had been introduced in 2008 with an intention to streamline appeals procedures. Our
Review extended over a six month period and was based upon: written submissions, mostly in
response to two ‘Issues Papers’ (consultation documents) that we published; an extensive series of
meetings we held with interested parties, including consumer representative bodies, companies,
regulators and government departments; detailed analysis of the substance of the individual cases
that had passed through the new system; a study of appeals systems in overseas jurisdictions; and a
study of the role and scope of Australian administrative tribunals in reviewing other types of
administrative decisions ‘on the merits’ . In consequence, we collected a considerable body of
evidence.

September 11, 2013

Letters and Notes

Security of electricity supply: is a Capacity Market the answer?

The Energy Bill, currently on its passage through Parliament following its inclusion in the Queen’s Speech, proposes a number of important changes to the UK energy market. Although the Bill contains several elements, its focus, notwithstanding its title, is on electricity rather than on other parts of the energy market. Within this narrower purview, electricity market reform (EMR) takes centre stage. In its introduction to this part of the Bill the Department of Energy and Climate Change (DECC) explains that the reforms are being put in place to attract £110 billion of investment which it claims is needed to replace generating capacity and upgrade the grid. Two key elements of EMR are the introduction of a system of contracts to support new nuclear and other lower carbon generation (the so-called contracts for differences, CfDs) and the development of a ‘Capacity Market’.2 It is with this latter element, the Capacity Market, that this paper is concerned.

June 1, 2013

Documents

Capture of independent sectoral regulators

Capture is an ever present risk to the benefits of independent sectoral regulation. The primary mode of capture may shift over time. Political ‘capture’, or undue influence, is a key current threat.
Conventionally, ‘capture’ is the tendency for regulators to take decisions that are biased in favour of the interests of the industry they regulate rather than the customers or wider society on whose behalf they regulate.

June 1, 2013

Documents

Is it possible to serve more than one master? Regulatory issues where there are multiple regulatory mechanisms

Where it is plainly in the public interest, there can be multiple regulatory mechanisms that do not imperil the independence of the regulator. To achieve the goal of alignment of achievement of shared objectives, protocols or MOUs, government guidance to independent regulators are often the most transparent and efficient way of promoting the interests of the consumer.

April 26, 2013

Documents