The role of public policy and its relation to private sector investment in driving innovation for a low carbon and secure UK electricity system- a Historical Perspective

Mr Nick Hughes, King’s College London

The configuration of technologies and infrastructure which currently supports the UK electricity system owes much to the period of nationalised control which took place between 1947 and 1990. In the last two decades, privatisation and liberalisation has seen a shift in the ownership of this large network, altering the flow of profits and investment. Very little has changed however in the way that end user consumers experience energy use, and there have been no obvious improvements for consumers such as significantly reduced costs.

This paper considers the evolution of the UK electricity system from a historical perspective, from the independent development of regional grids in the early decades of the Twentieth Century, through the post war nationalisation period and the subsequent privatisation. In respect of each major political intervention it considers what impact was made, how investment flows were altered, and how this affected innovation and the deployment of physical infrastructures and generation technologies, which have led to the make up of our current system.

From this perspective the paper then asks how the current system is likely to continue to evolve, what kinds of technologies will continue to be invested in, and whether radical innovation in the sector is possible under such a regime. In the light of this it proposes options for policy to regulate the system in as efficient a manner as possible, whilst providing sufficient incentives for the kind of innovation required to deliver a portfolio of technologies, capable of delivering a secure and low carbon electricity system in the coming decades.

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