Article on security of supply in the energy sector

John Davies and Mike Huggins, two specialists in energy economics in Frontier Economics Ltd (London), published an article in the August edition of UK Powerfocus, examining the economics of guaranteeing electricity supply. The authors discuss the concept of customers willingness to pay for additional security and note that in other sectors, such as aviation and food retailing; long term investments to secure critical supplies are generally left to the market. If the private sector is less likely to provide such security, left to its own devices, it may reflect uncertainty about the commitment of regulators to the free market, rather than some inherent properties of the electricity generation industry. UK Powerfocus is a monthly newsletter about the British electricity sector and can be obtained from www.power-ink.com/publishing.htm#newsletter.