The split of the energy industry into monopoly and competitive businesses has become a global model, and it remains among the most competitive. The spread of retail competition in the water industry from Scotland to England may be just as widely copied.
That does not, however, mean our market rules are perfect. We have already changed from the “pool” to the New Electricity Trading Arrangements. Electricity Market Reform acknowledges that we need to develop the market further to get the outcomes we want from it.
It’s easy to think that as the “first mover” in market reform, we have the best solution, and as the European Commission drives forward its energy competition agenda it’s clear that we want to influence its development. But influencing does not mean imposing our own solution on our European partners.
The UK can be a bit of grit in the EU’s wheel. Sometimes for good – showing that a competitive market can be successful – sometimes not to anyone’s advantage – as David Cameron may have found after he exercised the UK “veto” and left our European partners thrashing out the details of the eurozone’s rescue.
Acer board member Walter Boltz warned the UK that Europe-wide trading arrangements for gas (and probably electricity) were unlikely to be identical to those currently used here (see news story, page 8). We may need to make some changes in our framework.
We can go it alone – but then we may find we no longer have unfettered access to the market. This is a case where we need to balance the ideal solution with the most broadly acceptable.
Janet Wood
This article first appeared in Utility Week’s print edition of 9 March 2012.
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