The British Electric Industry 1990-2010:
The Rise and Demise of Competition

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Review by Dominic Maclaine, New Power, 30 April 2011


The British Electric Industry

1990-2010: the rise and demise

of competition

Are people like wine? Do they mellow with age? Alex

Henney seems to. Well a bit.

His seminal 1995 polemic “The proposals for

liberalising the electricity market in England and

Wales in 1998 – a poll tax on wires” was a scorching

assessment of plans to introduce electricity retail

competition to the retail market.

His latest book “The British Electric Industry

1990-2010: the rise and demise of competition”

does not seem to be as caustic as the former

however Henney still retains a bit of his bite.

As the title suggests the book covers the

electricity industry and how competition briefly

surfaced for a couple of years but then was

squashed and fell off the radar for various reasons –

most notable of which was the rising environmental


The tome is broken into six parts. The first covers

the wholesale market between 1990 and 2010 and,

as Henney describes it ‘the wasteful and fruitless

creation of the New Electricity Trading Arrangements

which together with the creation of the oligopoly was

the first two step in the demise of the market’.

The second part, dubbed ‘The Pandora’s box of

corporate change covers the ups and downs of the

British nuclear industry and its near demise and the

‘corporate whirligig’ that led to the formation of the

oligopoly which was the second step in the demise of

the market.

The third part covers the introduction of retail

competition (see feature) while the fourth covers the

development of network regulation from its initial

failure to its slow evolution using innovative


Death knell

The fifth part covers the ‘greening of the electric

industry, including the failure to deliver by both the

European Emissions Trading Scheme and the

Renewables Obligation, which he says is

fundamentally flawed, and the impossible and

expensive UK ambitions for 2020.

Henney says, “These are not only the death knell

of the market, but also raise the question of when

will the wheels come off the venture as the cost

becomes apparent and people realise the futility of

our puny unilateral efforts to impact on climate

change while China and India pump out ever

increasing volumes of CO2 from coal plant. “

Henney asks in the last sentence in the book

whether someone in a decade will write, “The British

Electric Industry 2011-2021: the rise and demise of


The lessons in this book should be invaluable for

policy makers, policy influencers, such as civil

servants making recommendations to ministers, and

companies interested in investing in the UK energy


As Professor David Newbery says in the book’s

preface, “Too often, civil servants, freshly transferred

from some other set of concerns, found themselves

on steep learning curves as they tried to gain a level

of understanding already reached by the key

industrial players and, not surprisingly, the were often

wrong footed as a result, or failed to convince their

political masters of the lack of wisdom of some

proposals – Neta, mass market supply, the Climate

Change Levy, and the Renewables Obligation scheme

spring to mind. This book does an immense service

in showing that ignorance is both costly and


A highly recommended read.

* ‘The British electricity industry 1990-2010. The

rise and demise of competition’ by Alex Henney is

available from Price





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