Reshaping the CEGB: Electricity privatization in the UK☆

Abstract The privatization of the electricity supply industry (ESI) in England and Wales is the most complex that the government has undertaken, for an industry with a turnover of nearly £12 billion has been restructured, and a new market in power stations' output created. This paper outlines the major provisions, which mostly affect the former Central Electricity Generating Board (CEGB). Most of the provisions are closely related to optimal pricing rules. The main areas of weakness are that there may not be very much competition between generators, and that the incentives for building new generating capacity may be too weak.