Response to Energy Cost Review – Professor Helm

Professor Dieter Helm’s review makes a valuable contribution to UK strategic energy planning and management.

The strengths of the review are that it has been completed speedily and that it provocatively makes innovative proposals for restructuring the UK energy market and for re-modelling the role of government in delivering energy security, lower energy costs and carbon reduction.

The weakness is that the way the report has been presented risks undermining the vital transition towards a low carbon energy, as illustrated by the following headline in the Daily Telegraph;

“‘Excessive’ green taxes are forcing up fuel bills, official review finds”

Major public investment in assisting private and public sector innovators develop new low carbon energy infrastructure technologies and applications was necessary, and still is necessary, before markets deliver price reductions. This evolutionary process is very well illustrated by the most recent Contracts for Difference in Off-shore wind, the lowest of which is around £57 MWh

It is a good idea to take strategic national investment out of the direct service cost to consumers and to transparently present investment costs separately. What needs to be made clear is the governments commitment to making this investment happen.