Lessons from the attempted privatization of nuclear power in the United Kingdom

This paper describes some lessons for the US from the restructuring of the Electricity Supply Industry in the United Kingdom. The British found that the policy objective of introducing competition into the generation of electricity was not consistent with the desire to expand their nuclear power industry in the private sector. Recently passed US legislation to introduce competition in the generation of electricity might have the same effect as the restructuring of the British Electricity Supply Industry. The British pressurized water reactors are US designed/constructed and the regulatory system is similar to one that now exists in the US. The British experience suggests that the disincentives resulting from the introduction of competition could weight any benefits from regulatory reform. The British experience also shows the problems that can occur when decommissioning cost estimates begin to escalate rapidly. Comparisons of the decommissioning cost estimates in the two countries suggest that the US estimates are optimistic