4th September 2014
The Big 6 British energy companies are under sustained attack from politicians and the media, and the Competition and Markets Authority (CMA) inquiry is being urged to consider whether they should be broken up. Unsurprisingly the companies have been putting up a robust defense of their conduct, and have argued that the vertical structures are in the interests of customers. These arguments matter, but they are not the only ones – or indeed necessarily the most important. This short paper will...
26th June 2014
Though no part of any grand plan, and certainly not by intention, the British energy market has morphed from a liberalized quasi-competitive market into one that is driven by the state. It has happened largely by accident rather than design, but it also has a remorseless political economy logic behind it. It is the unintended consequence of a long series of well-intended interventions. The result is closer to the old nationalized industry command-and-control structures, which had the Central...
1st June 2014
After a short pause, the borders of east and southeast Europe are again in flux, as they have been on and off since the early Russian people established Kiev as their capital. Crimea was annexed by Catherine the Great. The British and others fought the Crimean War in the nineteenth century and Russia’s imperial expansion towards the Balkans helped to trigger the First World War. Stalin created the greatest Russian empire – the Soviet Union – which Gorbachev lost. Putin regards...
22nd May 2014
Third in a series of Commentaries for the Energy Futures Network
16th March 2014
Second in a series of Commentaries for the Energy Futures Network
11th February 2014
First in a series of Commentaries for the Energy Futures Network
28th January 2014
It is fashionable to state that there are three objectives of European energy policy: security of supply, low carbon and affordability. Yet this “trilemma”—how to achieve all of these three simultaneously—is far from straightforward. None of the three objectives is well defined. What does security mean? Some suggest this means self-sufficiency, yet a moment’s reflection tells us that if in the last century Europe had pursued this, then not much economic development...
12th December 2013
The geopolitics of oil has remained remarkably static for the last 40 years since the Iranian Revolution at the end of the 1970s. The stylized facts have been that the US would have to import ever more oil to meet its ever growing demand, and that the Middle East would increase its dominance. To meet this demand, the US remained committed to keeping the Gulf open, and to support Saudi Arabia as its key ally against the pariah state of Iran. The established order relied on three related...
22nd November 2013
We live in extraordinary times. Real interests are negative, have been negative for several years and the forward guidance from central bankers suggests that they believe they are going to stay that way for several years to come. Yet this is a very unnatural state of affairs: the long run interest rate should roughly approximate the growth rate. Assuming that this is about two per cent then that too is roughly what the long run interest rate should be.
14th November 2013
The state of British infrastructure is the source of almost continuous study and criticism. There is now a host of new demands in water, energy, transport and communications which require a step change in investment. The Coalition government has made a series of reforms—to planning, finance, and the setting of priorities—which have been drawn together in National Infrastructure Plan statements. A number of high-profile and large-scale projects have been advanced...
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