TABLE OF CONTENTS The industry privatization was successfully completed in the early 1990s, and competition did, as planned, take effect in the generating and retailing of electricity. What it did not do was open the industry to different forms of generation and models of electricity supply in fact, the reverse happened. With a customer base of millions and guaranteed income in perpetuity, the CEGB had an enormous research budget and could in theory invest in new forms of generation that might not provide an economic return for many years. One continuing complaint against the company, however, was that public-sector inertia and an institutional belief in the existing model of ever-larger central power stations combined to stifle innovation.
But when the private electricity generators took over, the basis on which they could compete for customers among the retail companies was mainly the price of the electricity they supplied. This drove down electricity prices for the whole of the late 1990s and the early years after 2000, partly because efficiency improvements meant there were savings to be made, but also because oversupply drove prices down further. Investment decisions were driven not by the possibility of changing the power system but by the need to build any new power-generating capacity as fast as possible, and at as low a capital cost as possible, so it could start earning income for the company immediately. The result was a so-called 'dash for gas' during the 1990s. Gas-fired electricity generation was...
