The Power of Networks: Defining the Boundaries of the Natural Monopoly Network and the Implications for the Restructuring of Electricity Supply Industries

This article examines the origins, development and effects of the liberalisation and privatisation of electricity in Britain and Europe. It notes that common issues, such as the extent of the natural monopoly component and the recovery of sunk and fixed costs, persist across public and private forms of ownership, and points to the difficulties in establishing prices which reflects efficiency gains and provide adequate incentives for long-term investment