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The Restructuring and Privatisation of the Electricity Supply Industry in Northern Ireland: Will it be Worth it?

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  • Pollitt, M. G.

Abstract

Until 1992, the electricity supply industry in Northern Ireland was controlled by a single state-owned enterprise. It was then restructured into three new generating companies and a transmission and distribution company, all of which were privatised. Since then, unit costs have fallen sharply but prices have risen relative to the rest of the United Kingdom. This paper conducts a social cost benefit analysis of the restructuring and privatisation by looking at the efficiency gains and the actual and future investment and environmental effects of the process. It concludes that relative to the central counterfactual, the net gains are equivalent to a permanent cost reduction of 6% per annum, consumers pay 13% higher prices, while the government gains around £1.3bn in asset sales and higher tax revenue.

Suggested Citation

  • Pollitt, M. G., 1997. "The Restructuring and Privatisation of the Electricity Supply Industry in Northern Ireland: Will it be Worth it?," Cambridge Working Papers in Economics 9701, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:9701
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    References listed on IDEAS

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    Cited by:

    1. Pollitt, Michael, 2009. "Evaluating the evidence on electricity reform: Lessons for the South East Europe (SEE) market," Utilities Policy, Elsevier, vol. 17(1), pages 13-23, March.
    2. Mota, R.L., 2003. "The Restructuring and Privatisation of Electricity Distribution and Supply Business in Brazil: A Social Cost-Benefit Analysis," Cambridge Working Papers in Economics 0309, Faculty of Economics, University of Cambridge.
    3. Nepal, Rabindra & Foster, John, 2015. "Electricity networks privatization in Australia: An overview of the debate," Economic Analysis and Policy, Elsevier, vol. 48(C), pages 12-24.
    4. David M Newbery, 2002. "Regulating Unbundled Network Utilities," The Economic and Social Review, Economic and Social Studies, vol. 33(1), pages 23-41.
    5. Newbery, D., 2002. "Issues and Options for Restructuring Electricity Supply Industries," Cambridge Working Papers in Economics 0210, Faculty of Economics, University of Cambridge.
    6. Scott Atkinson & Claudia Halabí, 2005. "Economic Efficiency and Productivity Growth in the Post-Privatization Chilean Hydroelectric Industry," Journal of Productivity Analysis, Springer, vol. 23(2), pages 245-273, May.
    7. Jamasb, T. & Mota, R. & Newbery, D. & Pollitt, M., 2004. "‘Electricity Sector Reform in Developing Countries: A Survey of Empirical Evidence on Determinants and Performance’," Cambridge Working Papers in Economics 0439, Faculty of Economics, University of Cambridge.
    8. Massey, Patrick, 2004. "Is Irish Utility Regulation Failing Consumers?," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), pages 1-18.

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