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While you quote the example of Germany and Italy, you do not seem to reference what is probably the most mature "deregulated" market in electricity and gas - namely the UK. I put that in quotes as there is a strong independent regualtor in OfGEM.

If I am not mistaken, France has one of the highest proportion of generation of electricty from nuclear in the world and the enthusiasm of both the Corps de Mines and various Presidents for "grands projects" has more to do with that than any environmental, technical or commercial concerns. How, for example, are the costs of decommissioning closed stations taken into account, bearing in mind that it will need a permanant fund to ensure the safe storage of many components so far into the future that it should be considered indefinite?

While there will certainly be a place for fission reactors in the interim, the future will be in fusion reactors and there the development is indeed national and international in nature. But while these will indeed almost certainly be first built by governments or extremely large companies, there are other aspects to the UK model of privatisation that are equally as valid in conservation.

As a short description I should perhaps explain that the various regional power supply companies already purchased their electricity from national supplers. On privatisation, these were sold off in two groups for England and Wales. The first were grouped around the nuclear plants, with the government retaining a "golden share" to ensure safety. The others were sold as a separate block. Aligned to that the national grid and the regional companies were also sold off (some to be brought by EDF at a time when they were protected from reverse purchase!). These maintain local distribution networks and can retail BUT there is complete freedom for any company to retail to consumers using their wires for a fee. Thus London Electricity (AKA EDF) maintain the wiring to my apartment and read the meter. They charge a fee to either their retail arm or any other company. Those companies purchase their wholesale electricity on the open market from wholesale suppliers. These can either be the nuclear or conventional generators. New companies  have set up to either run the existing power stations or build new ones, often based on gas but also wind, asssisted by a  tax break.

Gas retailing has been similarly opened up. There are a huge number of different options for purchasing gas and electricity available to the UK consumer and that has brought down the home cost of power. As far as I can see, few other countries have taken this route. What it does mean is that the traditional "Electricity" companies now retail gas as well (and vice versa). This gives the consumer choice in that, for example, rather than chosing the cheapest, you can opt for a supplier who only purchases from wholesalers using renewables.  My retailer (Scottish Power) does such a tariff but also has an "Airmiles" option for collecting travel vouchers and a minimum cost option.

The rules also allow for any individual to sell privately produced electrity back to grid for them to wholesale. This means a lot of renewables become economic. Old water mills are having their equipment renovated so that they generate electricity. Any excess over the owner's use is sold back. Similarly new gas fired boilers for ordinary houses can be used to generate electricity from the waste heat and that used in home or sold back once the individual home's needs are met. This system has obvious advantages for photo-voltaic setups. With it, the house owner would need to rely on banks of batteries to store power during the day when they are away at work and little power is used in the home. Instead, they sell it during the day and buy in the night.

These are not so much a function of the way in which the largest wholesale power supplies are generated but the way in which small generators are allowed access to a competitive retail system.      

by Londonbear on Thu Sep 15th, 2005 at 01:35:56 PM EST

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