Market power mitigation in the UK power market

Market power in generation was a significant problem throughout the 1990s, following the privatisation of the electricity industry in England and Wales. The industry's regulators fought this market power with a series of reports criticising aspects of the dominant generators' behaviour, a temporary cap on prices, and two rounds of plant divestitures (voluntary, but agreed in the face of a possible reference to the competition authorities). At the end of the decade, the regulator and the government imposed a new set of wholesale market rules, just as the industry reached a competitive market structure, and prices fell.