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Gas and Electricity in Great Britain

  • December 2015
  • -
  • MarketLine
  • -
  • 19 pages

Summary

Table of Contents

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Introduction

UK gas and electricity markets were liberalized, in order to introduce competition into generation and retail supply. However, the six largest private-sector energy companies dominate both with large market shares. Also, regulator Ofgem has reported that while collusion does not occur, some tacit coordination of retail prices does. This report examines the evidence.

Features and benefits

* Find out the structure of the UK electricity market before liberalization and today.
* Discover how major players, while avoiding illicit collusion, can coordinate their prices.

Highlights

Market shares within suppliers of electricity and gas to the final consumer have remained practically unchanged after the privatization of the sector. This questions the validity of the open market competition between players operating in both markets.
The market participation of smaller suppliers trying to expand their participation in the retail market reached only 5% after more than 10 years of market liberalization and privatization. The possibility of disrupting the market dominance of the biggest 6 suppliers is far from obvious even after the privatization of the system.

Your key questions answered

* What are the main barriers faced by the new entrants to expand their presence in the market?
* Is there open market competition between companies operating within the energy sector in Great Britain?

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