The Restructuring and Privatisation of Britain's CEGB-Was It Worth It?

We report a social cost-benefit analysis of the privatisation and restructuring of the Central Electricity Generating Board which generated and transmitted all public electricity in England and Wales until 1990. The main benefits came from generator efficiency gains, switching from nuclear power, and lower emissions. The main costs came from higher prices for imported French electricity, the cost of restructuring and premature investment in new gas-fired generating plant. Our central estimate is a permanent cost reduction of 5% per year, equivalent to an extra 40% return on assets. Consumers and government lose, and producers gain more than the cost reduction.