Investments in power generation in Great Britain c.1960-2010

Abstract

Investments in power generation in Great Britain c.1960-2010 -The role of accounting and the financialisation of investment decisions. Abstract PurposeThis paper explores the increasing role of financialisation on investment decisions in the power generation industry in Great Britain (GB). Such decisions affect society, and the relative role of financialisation in these macro-levels decisions has not been explored from a historical perspective. Design and methodThe paper draws on historical material and interview data. Specifically, we use an approach inspired by institutional sociology drawing on elements of Scott's (2014) pillars of institutions. Applying concepts stemming from regulative and normative pressures, we explore changes in investments over the analysis period to determine forces which institutionalised practices -such as accounting -into investment in power generation. FindingsInvestments in electricity generation have different levels of public and private participation.However, the common logics that underpin such investment practices provide an important understanding of the political-economics and institutional change in the UK. Thus, the heightened use of accounting in investment has been, to some extent, a contributory factor to the power supply problems now faced by the British public. Originality/valueThis paper contributes to prior literature on the effects of financialisation on society, adding power generation/energy supply to the many societal level issues already explored. It also provides brief but unique insights into the changing nature of the role of accounting in an industry sector over an extended timeframe. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 IntroductionThe financialisation of energy policy implies increased use of market mechanisms, with the financial sector and financial actors (such as accountants) playing a critical role in the decision making process of investments in power generation assets. However, with Great Britain (GB) currently witnessing an investment hiatus, should an essential commodity such as electricity, be subject to values and ideology of this phenomenon? In other words, should investments in power stations be financialised 1 ? With the electricity industry struggling to secure investment, this paper challenges the paradigm of neo-liberal economic policy which is supported by financialisation for the energy sector. To be specific, this paper examines the increasing impact of accounting (with those using accounting as the financial actors with financial motive in the financialisation process) on such decisions. We do this by reflecting on historical developments in GBs generation market from circa 1960-2010 2 .Electricity is essential to support business and households, and, thus, so is maintaining a secure production of electricity. In power generation, the importance o...

Accountability and accounting for fisheries – six decades of reporting by the Electricity Supply Board of Ireland, 1935–1993

“…Thus, for the entire period of the analysis here, the ESB was (and still is) accountable by law to the Irish government as a majority shareholder. This contrasts with its nearest neighbour, the United Kingdom, which saw its power generation sector gradually become more financialised from the late 1960s, with full privatisation from the 1990s (see Warren et al. , 2018).…”

“…Thus, for the entire period of the analysis here, the ESB was (and still is) accountable by law to the Irish government as a majority shareholder. This contrasts with its nearest neighbour, the United Kingdom, which saw its power generation sector gradually become more financialised AAAJ 36,6 from the late 1960s, with full privatisation from the 1990s (see Warren et al, 2018). This more direct accountability, with associated indirect accountability, may be a contributory factor towards the balanced use of language as conveyed in Figure 5 (hedging strategies) and indeed towards an arguably better form of reporting than that reported by Dey and Russell (2014) in a non-state-owned Scottish power firm.…”