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Sunday 31 August 2014

Unit 3: Ofwat curbs price rises

Here is an important example of regulatory control of utility businesses with regional natural monopoly power. Ofwat is requiring regional water companies to cut their bills in real terms for the next five year pricing regime.

Regulatory agencies are often accused of failing to be sufficient strong with suppliers leading to allegations of regulatory capture i.e. producer interests dominate consumer interests. Ofwat may be an example of a regulator that avoids this criticism.

Click here for the article from BBC news

Questions for discussion:

Why does the water industry need regulation?
Are there any disadvantages to the consumer of govt intervention?

Tuesday 19 August 2014

Unit 1: Cost benefit analysis and Swansea Bay



Plans for the Swansea Bay tidal lagoon power station are potentially a superb case study to use when teaching the multiplier effect, renewable energy, cost-benefit analysis, economies of scale and different forms of government intervention including subsidies for harnessing new energy sources.
According to an article in the Independent:

"The £850m, six-mile-long U-shaped seawall by the Swansea docks will not only generate enough electricity to power 120,000 homes for 120 years – it will also create nearly 2,000 construction jobs in the two years it takes to build; and it will leave the city with a tourist attraction drawing in up to 100,000 visitors a year."

News articles:

Tidal power generator unveiling hailed as landmark(BBC August 2014): http://www.bbc.co.uk/news/uk-wales-south-west-wale...

Swansea Bay £850m tidal lagoon plan submitted (BBC February 2014): http://www.bbc.co.uk/news/uk-wales-26087779


Flooding concerns raised over Swansea Tidal Lagoon project (Wales Online, July 2014): http://www.walesonline.co.uk/business/business-new...

Unit 1: Monetary policy - Factors affecting Interest rate decisions

Click here for a really informative piece from Larry Elliott at the Guardian on some of the factors that the Bank of England will take into account when deciding the moment to move policy interest rates up from their historic low of 0.5%. 
Mark Carney in thoughtful mood!

To think, there are students who might make it through their entire secondary school education without experiencing a change in UK monetary policy interest rates!