The price of independents: an analysis of the independent power sector in England and Wales

This paper presents a focused analysis of the role of entrants into the electricity generation market since privatisation. It examines subsequent developments in the market and in the industry's structure and performance. The analysis draws heavily upon new information gained from telephone interviews with many of those involved with the so-called “independent power producers” (IPPs), as well as information in the existing literature. Our key finding is that IPP entry has not significantly increased competition and has adversely affected the future viability of the electricity system. We attribute these failures to the very policies that encouraged the initial entry of the IPPs.