An essay examining claims that electricity liberalization lowers prices. It shows that Nordic success depended on stable base-load power from hydro and nuclear energy, contrasting it with price spikes and fuel poverty in liberalized markets like the UK.

2016-03-24
This is a continuation of the previous chapter.
The premise of this narrative is a rosy one: that electricity liberalization would increase new power producers, promote competition, expand renewable energy businesses, lower electricity prices, and significantly reduce dependence on nuclear power.
As will be examined in more detail later, let us briefly verify this claim.
First, regarding the assertion that prices would fall— they do not.
While prices did become cheaper in the Nordic countries, in most liberalized nations electricity prices have remained stuck at high levels.
In the United Kingdom, for example, electricity prices had surged to fully double their pre-separation levels of 1998 by 2009, giving rise to a social problem known as “fuel poverty,” in which households spend 10 percent of their income on energy.
Why, then, did the Nordic countries succeed?
It is because Sweden and Norway possessed solid base-load power sources such as hydropower and nuclear energy, and relied far less on price-volatile energy sources like thermal power generation.