Dieter Helm knows more than most people about the UK energy market. His website is packed with useful papers, and I really enjoyed his recent book [amazon_link id=”0300197195″ target=”_blank” ]The Carbon Crunch[/amazon_link]. He has another one due out next year, Natural Capital: Why It Matters – Prof Helm chairs the Natural Capital Committee.

[amazon_image id=”0300197195″ link=”true” target=”_blank” size=”medium” ]The Carbon Crunch: How We’re Getting Climate Change Wrong – and How to Fix it[/amazon_image]

This week I read through one of his older books, [amazon_link id=”0199270740″ target=”_blank” ]Energy, the State and the Market: British Energy Policy Since 1979[/amazon_link], published in 2003, having only dipped into it previously. It’s an excellent, detailed account which intertwines economics, history and political analysis – as any rounded understanding of energy markets would require. Energy is so fundamental to the economy that it will always be a political issue, and private ownership simply changes the role of the state from producer to regulator.

Although obviously written long before the recent concern about prices and market structure, now being scrutinised by the Competition and Markets Authority, the book makes plain the inevitable trilemma: efficiency, affordability and sustainability. The political debate has got no closer to acknowledging the unavoidable trade-offs in the 10 years or so since the book was written.

[amazon_image id=”0199270740″ link=”true” target=”_blank” size=”medium” ]Energy, the State, and the Market: British Energy Policy Since 1979[/amazon_image]

There is, by the way, a good comment here on the University of Manchester Policy blog on the market reference by Martin Stanley, former Chief Exec of the Competition Commission.

The other thought prompted by reading the book it is how terrifically complicated the markets for gas and electricity are – and how constrained the future choices are by past investments and institutional structures. I thought I knew this already, as I’m a member of a stakeholder advisory panel for EDF Energy in the UK, but seeing all the detail set out in one place has really underlined it. It is striking in Helm’s account how frequently major, disruptive structural decisions have been taken on the basis of assumptions about oil prices and growth that have proven massively wrong. Not a very cheering read after news this week that the National Grid is seeking emergency supplies because it expects electricity shortages this winter.