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Faculty of Economics

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Newbery, D. M.

A Nuclear Future? UK Government Policy and the Role of the Market?


Abstract: UK energy policy has evolved since the 2002 Energy Review (PIU, 2002) in which Tony Blair introduced the report and noted that “securing cheap, reliable, and sustainable sources of energy has long been a major concern for governments”. The new Department of Energy and Climate Change, DECC, has rephrased its objectives3 to “ensure our energy is secure, affordable and efficient” and “bring about a transition to a low-carbon Britain”. The shift from “cheap” to “affordable” is significant, as meeting the low-carbon (low-C) targets will not be cheap, but should be affordable. We forget that in the interwar period electricity prices were three to four times more expensive than now in real terms. Since then dramatic improvements in efficiency have allowed costs and prices to fall. If one considers that real wages have improved by a factor of four over this period, electricity prices relative to earning power are now less than one tenth of their interwar level.

Author links: David Newbery  


EPRG Paper Link: 1011

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