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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.

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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.

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September 11, 2013
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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.

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June 1, 2013
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Documents

The UK’s carbon price floor policy

This year’s (2011) series of Beesley lectures was opened by Dieter Helm’s wide ranging examination of the UK government’s Electricity Market Reform (EMR) proposals and closed by Paul Dawson’s focused dissection of the carbon price support policy that has been developed alongside the EMR programme.
The opening lecture and the discussion that followed it illustrated the rather unusual state of affairs that exists in energy policymaking at the moment: there appears to be a consensus among leading economists familiar with the energy sector that the EMR proposals are badly flawed, and that they can be expected to fail.

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January 1, 2012
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Documents

Energy regulation: lessons from experience

The Chairman has asked us to consider two decades of regulation but, in dealing with energy regulation, I have to look much farther back into the past – some fifty years – to see the present situation in context. Regulation of the two energy utilities is bounded by much wider regulation of all the energy industries, the so-called “energy policies” that British governments have almost always had. Over the last few years, there has been a move from minimal energy policy constraints to a state in which those constraints are once again binding, indeed dominant.

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January 1, 2012
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Documents

Review of Guernsey’s utility regulatory regime

This report constitutes our assessment of Guernsey’s utility regulatory system as applied to the regulation of electricity, post and telecoms, and it includes recommendations for change to improve the framework and conduct of regulation. Although initially triggered by issues noted in the April 2010 Requête, the scope of the Review has broadened to take account of other structural, policy and institutional factors. We consider this broadening desirable, as any assessment of the effectiveness of a regulatory regime requires an examination not just of the regulator, but also of the broader policy and institutional structure of government within which regulation operates.

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October 15, 2010
Documents

Co-operation among energy regulators in the European Union

This paper addresses the questions of how and why do European energy regulators co-operate.It is divided into five sections: a description of the legal framewrorks and market structures of electricity and natural gas in the EU; why energy regulators have been introduced by most Member States and why different institutional formats have been adopted; why co-operation among energy regulators is necessary; the main objectives of the Council of European Energy Regulators; the role of regulators within the political and institutional framework of the EU.

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July 3, 2000
Documents

Regulatory risk and cost of capital: summary of views of interveiwees

Between July 1995 and January 1996 a series of one-to-one reviews were carried out with all the regulatory bodies, seven investment analysts, five companies each in the electricity and water industries, British Gas (BG), British Telecom (BT and British Airports Authority (BAA). Issues focused on the sources and nature of risk, the cost of capital and other pressing concerns of interviewees. This document provides a summary of the views expressed.

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July 16, 1996