There were two good stories today on the topic of price elasticity of supply and the time lags between planning a change in supply and being able to deliver it to the market. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> EDF given green light to build gas-fired power plant

Will <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Britain have sufficient supplies of energy to avoid regular power-crunches? At times of peak demand, there are concerns that Britain simply does not have the infrastructure to meet high levels of energy demand, leaving us dependent on imported energy whose price can be very uncertain.

This article is a good example of elasticity of supply and the time frame. The new

‘EDF Energy has been given the go-ahead to build a 1,300 megawatt gas-fired power station at West Burton, Nottinghamshire. The new plant, which will cost up to £600m, will have the capacity to supply as many as 1.5m homes. The company said the new plant would be part of its commitment to meet, in the short term, the projected “power crunch” caused by a shortfall in generation, which could begin in 2016 unless there is investment in new capacity.’

More here from the Guardian article: http://business.guardian.co.uk/story/0,,2202034,00.html

Expanding the rail network

Demand for rail continues to rise each year but the system’s capacity to provide services is limited. Network Rail plans to expand capacity with extra rolling stock and station improvements - but the time lags are very long - it will take years!

More available here: http://news.bbc.co.uk/1/hi/uk/7072584.stm