Publications

  • Penalty tariffs, open-ended regulation and embedding overcharging

    20th July 2015

    When, in the face of the sustained attacks from Labour’s Ed Miliband and Caroline Flint, OFGEM referred the electricity industry to the Competition and Markets Authority (CMA), many hoped the result would settle the controversies once and for all, restoring trust and putting the industry on firmer foundations. The CMA has now spent a year investigating the electricity market, and come up with its preliminary findings, and proposed remedies. Unfortunately these fail to convince on most fronts:...

    Energy

  • British energy policy - what happens next?

    16th June 2015

    Ed Miliband may have been vanquished by the electorate, but one of his legacies lives on. As the first DECC Secretary of State, he is the architect of Energy Market Reform (EMR), and a return to a state-driven energy policy. His now largely forgotten speech to at Imperial College “The Rise and Fall and Rise again of a Department of Energy”, in 2008 set out explicitly to change direction from the path followed since the 1982 Speech by Nigel Lawson on “The Market for Energy”. Indeed Miliband...

  • Natural Capital - Valuing the Planet

    12th May 2015

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    Environment

  • Catchment management, abstraction and flooding: the case for a catchment system operator and coordinated competition

    7th May 2015

    Since 2010 there have been a number of piecemeal reforms and developments across the water sector. These have included: the periodic review of the water and sewerage companies; the provision of further financing for the Environment Agency to address flood defences over a slightly longer period; a deal with insurance companies on flood risk; steps towards retail competition in water; and changes to the form and scope of agricultural subsidies for environmental improvements. It is widely...

    Water

  • In defence of the Green Belt

    20th April 2015

    A growing band of economists and geographers have been arguing the Green Belt is no longer fit for purpose and that it should be opened up for housing development. The argument is based upon a chain of assertions and purports to be based upon sound economic arguments and empirical evidence – all of which are questionable, and some of which are wrong.

    Environment

  • Regulatory credibility and the irresistible urge to meddle

    16th April 2015

    When the great utilities were being privatised, one of the key objectives was to establish a regulatory regime which would be credible to investors and fair to customers. The way it worked was that the companies would be given fixed contracts ex ante, and these would be reset on a periodic basis. Within the period, prices would be fixed by an RPI-X formula. The logic was very clear: the only way in which the performance of the companies could be improved was to incentivise them to do so. Fixed-...

    Regulation

  • The Coalition Effect - Energy Policy and the Coalition

    26th March 2015

    The Coalition came to power with a ready-made energy policy developed under Labour. The Secretary of State was Ed Miliband, and his policy as it played out under the Coalition was to prove the basis of a return to a level of state intervention not seen since the days of the CEGB, British Gas and the nationalised industries. By the general election in 2015, the almost complete U-turn had been completed, abandoning most of the liberalised and competitive structures that had been the hallmark of...

    Energy

  • What should oil companies do about climate change?

    26th February 2015

    Imagine you are chief executive of a major oil company. Your economic forecasts tell you that the world remains stubbornly on a fossil fuel path for decades to come. The world is going to need you. But your forecasts also tell you that the result will be emissions that push up way beyond the level that your scientists tell you will limit global warming to two degrees. The world is on a path to burn all the oil you can find, and your oil will contribute to serious global warming. What do you do

    Energy

  • Competition in the British electricity sector: a set of practical reforms

    9th February 2015

    There has been widespread criticism of the performance of the British electricity industry over a number of years. These criticisms range across the full vertical chain. In the last couple of years the coal price has halved, and in 2014 the price of gas fell by over a quarter. The wholesale price of electricity in Britain is almost twice the level in northern Europe. Capacity margins have tightened so significantly as to require immediate short-term interventions. Retail prices have not...

    Electricity

  • The road to re-regulation

    12th January 2015

    The Labour Party has followed up its manifesto promise to freeze prices for 20 months if they win the General Election in May with a proposal for legislation now. Ed Miliband says: "We're going to bring before the House of Commons a vote in Parliament to say the government should bring forward fast-track legislation to ensure that we give the regulator...the power to cut prices." He is not alone. George Osborne has demanded falls in fossil fuel prices feed through to electricity customers, the...

    Energy