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This paper examines information technology's increasingly important role within the energy sector. It is helping to temper the rising costs and risks associated with scarcity; reduce the cost, and enhance the performance, of energy capital goods; and raise the productivity of installed assets. In particular it is capital-saving in a highly capital-intensive area of the economy. Information technology also opens up new organizational possibilities, especially in relation to gas and electricity supply systems. The responsibility of government is less to support energy R&D than to provide the appropriate institutional and regulatory framework within which the full benefits of the new technology can be realized.