Project Management

Is Privatization Enough? Finding Performance Breaks For UK Power Plants

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Executive Summary

The literature shows that for most UK industries privatization might be necessary but is not sufficient to produce economic benefits. Often prior changes in management or later changes in market structure and regulation have larger impacts than privatization itself. The authors ask what changes around privatization had the greatest impact on efficiency for UK electricity generators. They analyze the effects of privatization and other changes in incentives on plant efficiency using a newly compiled unbalanced panel of about 60 plants for the years 1980 to 2004. They measure efficiency as input demands for two standard inputs, fuel and labor as well as three air emissions, CO2, SO2, and NOx.

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