The Return Of Centralised Energy Planning

Abstract

After a brief period of liberalisation, the UK energy market is reverting towards its pre-1980s state in which central government intervenes extensively, particularly in the fuel choices of electricity generators. Many powerful interest groups benefit from centralised energy planning, which may be why the market reverts to that situation as a norm. Of the two principal reasons given for government intervention, there is little substance in the argument that it improves security of supply. There may be a better case for action to offset prospective climate change, but the present centralised approach risks massive errors. Decentralised, market-based action is more appropriate. © 2013 Institute of Economic Affairs.