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The Future of Retail Energy Markets

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  • Catherine Waddams Price

Abstract

Britain was one of the first countries to introduce competition to retail energy markets in 1998; after a decade of choice, around half of its residential consumers have switched supplier. This paper presents evidence on consumer and supplier behaviour over the decade since the markets were opened to assess the success of the ‘experience’ to date. The early debate about the value of extending choice to householders, in which David Newbery was amongst those who expressed doubts, remains to be resolved in an era of rising costs and increasing politicisation. “While Britain has coped very well with wholesale market power, ending the domestic franchise and removing regulation from the retail supply margin has exposed households to considerable increases in those margins, as switching costs appear significant, and vertically integrated companies have been effective in exploiting their power.†David Newbery, Market Design, EPRG working paper 0515 p.9, 2005

Suggested Citation

  • Catherine Waddams Price, 2008. "The Future of Retail Energy Markets," The Energy Journal, , vol. 29(2_suppl), pages 125-148, December.
    • Handle: RePEc:sae:enejou:v:29:y:2008:i:2_suppl:p:125-148
    DOI: 10.5547/ISSN0195-6574-EJ-Vol29-NoSI2-7
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    References listed on IDEAS

    as
    1. Evens Salies and Catherine Waddams Price, 2004. "Charges, Costs and Market Power: the Deregulated UK Electricity Retail Market," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 19-36.
    2. repec:spo:wpmain:info:hdl:2441/7189 is not listed on IDEAS
    3. Michael G. Pollitt, 2008. "The Future of Electricity (and Gas) Regulation," Working Papers EPRG 0811, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    4. Michael G. Pollitt, 2008. "The Future of Electricity (and Gas) Regulation in a Low-carbon Policy World," The Energy Journal, , vol. 29(2_suppl), pages 63-94, December.
    5. Chris M. Wilson & Catherine Waddams Price, 2007. "Do Consumers Switch to the Best Supplier?," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2007-06, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    6. Richard Green & Tanga McDaniel, 1998. "Competition in electricity supply: will ‘1998’ Be worth it?," Fiscal Studies, Institute for Fiscal Studies, vol. 19(3), pages 273-293, August.
    7. repec:hal:spmain:info:hdl:2441/7189 is not listed on IDEAS
    8. Olsen, Ole Jess & Johnsen, Tor Arnt & Lewis, Philip, 2006. "A Mixed Nordic Experience: Implementing Competitive Retail Electricity Markets for Household Customers," The Electricity Journal, Elsevier, vol. 19(9), pages 37-44, November.
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