The Impact Of Eu Liberalisation Policy On The Uk Energy Industry

Bargaining power of supplier: High levels of competition among suppliers act to reduce prices to producers. This is a positive for Ford Motor Company. Standardization of parts allowed Ford to reduce dependency on fixed supplier/vendor which goes into producer’s favor.

Bargaining power of suppliers – Being a big player in industries that are dominated by smaller players also ensures that suppliers don’t have much bargaining power.

Q1. There are a number of ways to analyze industry concentration. Three ways commonly used are the n-firm concentration ratio, the Herfindahl Index and even the Gini coefficient. These will be discussed in turn for their mechanics and the way that they are, or can be, used in assessing industry concentration.

The Herfindahl-Hirschman Index is calculated by summing the squares of the individual market shares of all participants. Also according to Department of Justice (2016), “The HHI reflects both the distribution of the market shares of the top four firms and the composition of the market outside the top four firms.” For example, there are unconcentrated results, which means the market is unlikely to have favorable competitive effects. Then there are moderately concentrated results that can either have unfavorable competitive effects or raise significant competitive concerns depending on what the HHI outcome was. Lastly, there are highly concentrated results that will enhance the market power, facilitating even more competition for the other companies. Therefore, in the end it is important to take note that problems with excessive concentration can lead to insufficient competition (Richman,

Energy market of UK was a monopoly market, then it turned into a competitive market. Doing business in a competitive market is not as easier as we think. Here, this change lead huge changes

In the mid-1960s, sources of natural gas were found in the North Sea. By the 1980s, although coal was the primary source of electricity in the country, gas was seen as the cleanest, cheapest and most reliable source of energy available (Bradshaw, 2012, p. 7). However by 2005, North Sea production dried up and the UK was once again dependent on foreign gas imports. In 2009 imports from foreign states supplied almost half the UK’s energy needs; by 2020 this is expected to rise to between 80 and 90 percent. In 2011, the demand for gas reached 37% (Taylor, 2013, p. 109). Thus like many other countries in the EU, today the UK is debating the costs of importing energy from overseas and the importance of energy security. There

Australia, much like the rest of the Western World, is becoming or has became a deregulated electricity sector. For our purposes, why a country deregulates can vary. As started in my previous essay, most of Australia’s privatization or deregulation of the utilities including electricity came down to two factors, one being money and following patterns of the other western countries who also have deregulated their electricity sectors and other utilities. However discussing only about deregulation and alternative energy portfolio standards is what we are focusing on.

The bargaining power of suppliers has similarly been defined as the market of inputs. This means that the suppliers to any business in the form of raw materials, equipment, work input, and services can serve as a source of power for the suppliers, especially when the number of substitutes is low. A supplier who enjoys monopoly may, in fact, charge exorbitantly for their unique products or services being rendered (Narayanan et al.,207-223).

• The number of suppliers – When the number of suppliers is higher the supply is greater.

Energy as gas or electricity constitutes a huge part of the current market supply, which have a strong impact not just in the environment but also in the economy as a whole. According to Allen, Hammond and McManus (2007) as energy worldwide demand is growing, the scarcity for resources grows too, which is threatening not only energy security but also energy costs. OFGEM´s (2014) report´s, analyses the gaps and adquisitions of the energy market supply in Great Britain, where they found that the energy service supplied is dominated by six main firms, which have been facing strong problems with consumers decreased trust, higher costs, wider barriers to entry, evidence of a possible tactic coordination and lack and weak

In recent years, Europe has been faced with the problem of continuous urbanization and excessive energy consumption, closing in on exhaustion of available energy resources. In view of this, the notions of sustainability and resilience have become paramount in resource management and policy-making. Within such a context, renewable energies play a key role in the global energy pool. Amongst these, wind energy production accounts for almost half (43%) of the global generating capacity [1]. Nonetheless, despite its obvious merits, the “Big Wind industry” comes with a number of potential shortcomings largely relating to the short life-span of these components and the lack of efficient operation and maintenance (Ο&Μ) planning schemes. The latter

In conclusion, the switching cost is the source of suppliers’ bargaining power. But it is limited due to a large supplier group.

This means that suppliers have the power and advantages on supply their product in higher cost. This supplier concentration will affect the cost of the product because the suppliers obtain the advantages. The competition force for bargaining power of suppliers is considered as medium. This is because suppliers of our product can considered as seldom. Therefore, suppliers have the advantages and power to sell their material at a higher price. The method to overcome this problem is to make a contract with suppliers which supply its material at a fixed price. This method is able to avoid the problem of unstable material price. Besides, it also ensures that our company will get the material on time due to the

In the case of major players bargaining power of suppliers is very low as theydictate the prices

In practice, energy subsidies come in different forms. (The IEA, 2002) and (UNEP, 2008) identify the following typical mechanisms by which governments support the production and consumption of energy: