Search and the development of competition in UK electricity supply

The aim of this project is to examine the development of competition in domestic electricity supply in the UK following the opening to supply competition in May 1999. This will be examined through the lens of movements in supplier tariff structures, drawing implications for the extent of competition between suppliers. Hence it will supplement existing work investigating consumer search and switching behaviour by means of sampling consumer switching decisions. Using the time path of tariffs, in relation to major cost inputs, questions of whether there is a tendency for incumbent supplier advantages over rival suppliers to persist and whether there is a tendency for prices to move more closely towards costs may be examined. As supplier numbers have fallen over time, investigation of the impact of consolidation on the nature of competition can be pursued. Moreover, there have been periods of both falling and, more recently, rising real input costs, so differences in behaviour across these circumstances can be examined. Finally, inferences may be drawn about companies' views on the extent and nature of consumer search and switching, for comparison with findings on these topics obtained from consumer surveys.