Energy Policy Issues after Privatisation

The purpose of this paper is to investigate how energy policy should respond to the changes in the organisation of energy sector associated with privatisation. The paper begins with a brief review of how energy policy was perceived before the 1973 oil shock, and the lessons learned from subsequent experience, both in terms of the issues which were thought to be important, and the theories which were argued to be relevant to its design. This brings us to the present, and the need to rethink energy policy in the light of experience and the changes in market structure. The four questions raised by these changes are: what should be the Government's policy on competition in the energy sector; how the privatised industries should be regulated; how the remaining publicly owned industries should be instructed to behave; and finally, what changes in taxation are now desirable.