Worldwide Business Information and Market Reports
ISBN 1-85765-800-0

Major changes have occurred within the industry,
resulting from privatisation which commenced in the late 1980s with the gas
sector, and was followed by similar moves in the electricity, coal and nuclear
sectors. Oil resources had always been in private hands. The culmination of the
procedure will take place in 1998, with the complete liberalisation of the
electricity and gas markets. Privatisation has provided the impetus for
competition, resulting in major restructuring of the energy industries and the
companies involved.
Whereas previously companies had concentrated their
efforts and expertise in one sector of the market, they are now able to exploit
other sectors. Thus regional electricity companies (RECs) and oil companies
have set up subsidiaries to supply the gas market, while the previous monopoly
gas supplier BG (formerly British Gas) aims to supply both electricity and gas
to consumers. The Scottish generator, Scottish Hydro-Electric is active in the
combined heat and power (CHP) market, while UK generator, National Power
operates several wind farms. Oil companies BP and Shell each have interests in
renewable energy.
Many organisations have seen the benefits of pooling their resources and expertise to set up joint ventures. Thus, within the oil industry's petrol retailing sector, an alliance has been formed between BP and Mobil; while the oil company Texaco has a joint venture with the liquefied petroleum gas (LPG) supplier Calor Gas to supply gas to the domestic market. The feasibility of `clean coal' technology is being investigated by a consortium consisting of RJB Mining, Texaco and National Power.
A succession of bids, notably in the electricity sector where 11 of the 12 RECs are under new ownership, has also changed the nature and structure of the industry. Some of the acquisitions have been by foreign concerns, notably from the US, thus creating a much more international industry.
Competition has provided the opportunity for
companies to supply several utilities to the same consumers. Thus, Scottish
Power supplies electricity, gas and water in the UK. Hyder, a group formed from
the REC Swalec and Welsh Water, supplies electricity and water to consumers in
Wales.
Text © 1998 Key Note
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Last updated by Duncan Nottage 5th March 1999