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A Nuclear Future? UK Government Policy and the Role of the Market

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  • David M. Newbery

    (University of Cambridge)

Abstract

UK energy policy has evolved since the 2002 Energy Review (PIU, 2002) in which Tony Blair introduced the report and noted that “securing cheap, reliable, and sustainable sources of energy has long been a major concern for governments”. The new Department of Energy and Climate Change, DECC, has rephrased its objectives3 to “ensure our energy is secure, affordable and efficient” and “bring about a transition to a low-carbon Britain”. The shift from “cheap” to “affordable” is significant, as meeting the low-carbon (low-C) targets will not be cheap, but should be affordable. We forget that in the interwar period electricity prices were three to four times more expensive than now in real terms. Since then dramatic improvements in efficiency have allowed costs and prices to fall. If one considers that real wages have improved by a factor of four over this period, electricity prices relative to earning power are now less than one tenth of their interwar level.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • David M. Newbery, 2010. "A Nuclear Future? UK Government Policy and the Role of the Market," Working Papers EPRG 1011, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:eprg1011
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    References listed on IDEAS

    as
    1. David M. Newbery, 2005. "Electricity liberalization in Britain: The quest for a satisfactory wholesale market design," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 43-70.
    2. Brunekreeft, Gert & Neuhoff, Karsten & Newbery, David, 2005. "Electricity transmission: An overview of the current debate," Utilities Policy, Elsevier, vol. 13(2), pages 73-93, June.
    3. Fabien A. Roques & William J. Nuttall & David M. Newbery & Richard de Neufville & Stephen Connors, 2006. "Nuclear Power: A Hedge against Uncertain Gas and Carbon Prices?," The Energy Journal, , vol. 27(4), pages 1-24, October.
    4. Roques, Fabien A. & Newbery, David M. & Nuttall, William J., 2008. "Fuel mix diversification incentives in liberalized electricity markets: A Mean-Variance Portfolio theory approach," Energy Economics, Elsevier, vol. 30(4), pages 1831-1849, July.
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    Citations

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    Cited by:

    1. Linares, Pedro & Conchado, Adela, 2013. "The economics of new nuclear power plants in liberalized electricity markets," Energy Economics, Elsevier, vol. 40(S1), pages 119-125.

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    More about this item

    Keywords

    Nuclear power; intermittent renewables; wholesale electricity markets; market design; transmission access; balancing; carbon tax;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy

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