Lessons from the UK and Norway

There is more than one way to privatise a nation's electric power industry. Britain's new system, for instance, is highly centralized. It has a mandatory pool for purchasers and generators of electricity-and essentially just two generators-plus a privately owned transmission system operator and a single regulator with czar-like powers. Norway's restructured power industry, in contrast, is decentralized. Direct contracts between purchasers and generators dominate, there are generators galore, and the electricity pool simply balances supply and demand in the light of whatever bids it receives. Yet despite their differences, the British and Norwegian systems have much in common. Both systems are adjudged more economical than before. They are both seen as successes by owners of system assets. Both systems now claim a reduction in costs to the end-user. Most significantly both can claim that restructuring has left system reliability unharmed.