At one time, there was a clear worldwide trend in favour of creating competitive electricity markets, using models similar to those adopted by the UK in 1990. However, with the power shortages and price rises in California, and problems in other new competitive markets, policy makers are now starting to examine more closely the advantages and disadvantages of market liberalisation and the circumstances in which it is most likely to be successful.
As the electricity industry developed in the first three quarters of the 20th century, the available technology favoured the creation of large, vertically-integrated utilities (which handled generation, transmission, distribution and retail supply), so as to maximise the benefits of economies of scale.
