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Competition in Energy Supply

In 1990, the UK government privatized the electric supply industry, and, in the years following, countries from Australia to Canada have followed suit. Select one country where the energy markets have been deregulated and one country that has not been deregulated. What are the positive and negative outcomes of the process on both the supply/sales and consumption sides of the industry? When comparing the deregulated market to one that is regulated, do you think the approach is a success? How have price and service been affected?

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One country where the energy market has been deregulated is the UK market. In this market, energy deregulation commenced in 1990. The UK experience shows that there were three stages of deregulation. During the first stage, there was limited deregulation. In the second state, there was genuine non-technical competition and more extensive deregulation. In the third stage, there was complete deregulation or pure price competition. In the UK, there was privatization, restructuring, and deregulation of all final energy prices. The positive results are that the consumers were that the quality of service has increased. The consumers have been able to get better prices by switching suppliers. The final consumer prices have fallen. The negative results are that incumbent and oligopoly power has remained ...

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This solution explains competition in the energy supply. The sources used are also included in the solution.