Power reforms: UK lessons for India

The power sector in the UK has almost come a full circle. After living with vertically integrated utilities till 1989, they unbundled, created markets both at generation and retail end, and today, they are back to a situation where 70% of the power generated is sold outside the wholesale market, directly by the generators to their utilities. It has been quite a journey since the enactment of the Electricity Act, 1989, which paved the way for the appointment of a regulator, called OFFER (now called OFGEM), and thereafter, leading to unbundling, both vertical and horizontal. Twelve distribution utilities were set up (called RECs) along with three generation companies (called National Power, Powergen and Nuclear Electricity) and also a national wires company (called NGC). All of them were privatised barring Nuclear Electricity.