This article shares the reasons the writers believe privatising energy has caused such high prices even taking into account that wholesale prices for gas and electricity are high at the moment due to covid and Ukraine.
“Supporters of privatisation claim that it benefits consumers, as market competition between suppliers should lead, in theory, to lower prices. In reality, the opposite has occurred. Even before the current energy crisis began, domestic energy bills steadily increased in “real” (ie inflation-adjusted) terms by 50% from 1996 to 2018. By early 2022, energy bills are expected to continue to increase by more than 30%. Over 3 million people in the UK are now estimated to live in fuel poverty.
Why has privatisation failed to deliver? A key part of the problem has to do with oligopolistic concentration in the energy sector. Though there has been an influx of smaller companies in recent years, the energy market is dominated by a handful of large companies: Centrica, the parent of British Gas, EDF Energy UK, E.ON UK, npower, Scottish Power and Ovo, which recently acquired the retail arm of SSE.
Often referred to as the big six, these companies control 77% of the UK household energy market. In addition to charging higher prices to consumers, the energy companies display many of the maligned characteristics associated with oligopolies: fat profit margins, use of outsourcing and layoffs, and the funnelling of billions of pounds to shareholders through dividend payments.”
www.theguardian.com/commentisfree/2021/nov/24/uk-energy-sector-public-ownership-bulb-collapse?CMP=Share_iOSApp_Other