Privatising energy is doomed to failure | Letters

Small, private energy firms can't hope to compete in a global market

The possible failure of some smaller energy suppliers might not raise major issues, even for their customers, but clearly illustrates the stupidity of privatisation of such vital national resources ("Small energy companies risk going bust in financial shock", News). Oil and gas prices are determined by global markets, so there is little scope for competition there; in fact, the artificial competitive elements might even contribute to increased prices as British suppliers outbid one another in order to get enough for their needs. The dozens of companies involved, all with shareholders, managers and employees to be paid, inevitably increase costs when compared with the state-run enterprises that successfully ran the businesses for decades.

At the same time, alternative energy supplies are very limited, while the bulk of the costs of energy delivery to consumers are fixed, so the role of competition is almost non-existent: companies can cut back on maintenance, a possible factor in the recent power failures, or staff wages, but not much else.