Non-discrimination clauses: their effect on British retail energy prices

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Abstract

UK governments and the energy regulator have shown increasing concern about the health of competition in the residential energy market, following their pioneering deregulation at the end of the last century. We identify the effects of introducing the non-discrimination clauses in 2009, a major regulatory intervention and the first since deregulation. We explore the effect of this intervention on the price movements of the six major players, and find that the nature of competition in the industry has changed, with less effective rivalry between the regional incumbents and large regional competitors following the intervention; companies seem to have ‘retreated’ to their home regions, leaving a market where pricing behaviour resembles more closely a duopoly between British Gas and the regional incumbent.
Original languageEnglish
JournalThe Energy Journal
Volume37
Issue number2
DOIs
Publication statusPublished - 2016

Keywords

  • Regulation
  • Energy
  • Non-discrimination
  • Vector Autoregressive

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