Privatisation and technological change: the case of the British electricity supply industry

Abstract

Since privatisation in 1991, there has been a transformation in electricity generation technology within the British electricity supply industry (ESI). In a sudden dash-for-gas, previously unused combined cycle gas turbine (CCGT) technology has been adopted for all new power stations in Britain. The dominant generation technologies before privatisation - coal-fired steam turbines and nuclear power - have been marginalised, and all proposals for new coal-fired and nuclear plant cancelled. Using a wide range of sources, including the evidence submitted to various parliamentary select committee inquiries, an analysis is made of the causes of recent changes in electricity generation technology in Britain. Particular generation technology projects are analysed in greater depth using personally-conducted interviews.

The research suggests that technological changes in the British ESI since privatisation can only be understood by reference to a range of technical, economic, regulatory, organisational, political and historical factors. The different technical forms of electricity generation reflect particular technical opportunities, economic criteria, institutional interests, and political priorities prevalent at different times in the industry's development. Before privatisation, the forms of generation technologies were largely a reflection of the vested interests of government and the corporate institutions of the ESI. During privatisation, the dominant influences on change were the government's dual policy goals of economic liberalisation, and securing the future of nuclear power. The postprivatisation changes reflect the radically different economic environment for the ESI, and also institutional rivalry in a semi-competitive market structure. CCGT technology, politically and institutionally excluded from the industry before privatisation, has gained ascendancy due to the interaction of a number of coinciding and largely unrelated dynamics. These include improved gas turbine technology, greater availability of natural gas, structural changes in the ESI, and the introduction of pollution abatement legislation.

Consideration is also given to the value, in analysing technological change in the British ESI, of a number of concepts and models from the technology studies and social shaping of technology literature. It is argued that since technological change is a complex and often unpredictable process involving a number of interacting dynamics, no single analytical model provides a fully satisfactory explanation. In the pre-privatised industry, Hughes' model of evolving sociotechnical systems offers the most insight. During and after privatisation, other concepts emphasising institutional interests and micro-social actor networks are of more value. Attention is also given to the notions of technological autonomy and determinism in the context of the British ESI. Although often associated with electricity generation technologies, especially nuclear power, autonomy and determinism are seen to neglect the dependency of technologies on their surrounding economic, institutional and political environments. Nevertheless, there is evidence of a distinctive dynamism of sociotechnical systems - generation technologies have been both cause and effect of the development of the ESI. CCGT technology, as well as reflecting the restructuring of the industry since privatisation, has enabled and promoted change.