UK Sets Up Energy Review
The UK government announced August 6 it has commissioned an independent energy review, to be led by Dieter Helm, that will recommend ways to keep power prices as low as possible.
The new review will consider the whole electricity supply chain – generation, transmission, distribution and supply. It was announced by Business and Energy Secretary Greg Clark who said the ambition is for the UK to have the lowest energy costs in Europe, for both homes and businesses.
Last week, energy supplier Centrica said it was increasing electricity prices by 12.5% from September. This embarrassed the government which, prior to June 8 elections this year, had threatened a price cap on energy retailers but then shied away, saying such action would be for the regulator to decide.
British energy regulator Ofgem said August 7, one day after Helm's appointment, that it would cut pre-payment electricity charges for 3 million households with effect on October 1, reduce the average level of their payments by £19 a year from about £1,067 to £1,048 for a typical dual-fuel pre-payment customer -- making permanent a temporary measure that it introduced in April 2017. However this falls short of an across-the-board price cap.
Clark’s department, BEIS, said the new energy review under Helm will also consider implications of the changing demand for electricity, including the role of innovative technologies such as electric vehicles, storage, robotics and artificial intelligence.
Last month Clark announced a new initiative to fund UK battery technological research and development. “We want to ensure we continue to find the opportunities to keep energy costs as low as possible, while meeting our climate change targets, as part of the Industrial Strategy,” said Clark August 6.
One of Britain’s leading energy experts, Helm is a professor of economic policy at the University of Oxford, and a former adviser to the UK Prime Minister from 2004 to 2007. His latest book ‘Burn Out – the End Game for Fossil Fuels’, published March 2017, argues that oil and gas firms need to either sell up and quit the business (“harvest and exit”) or else adopt radical strategies to adapt to a post-oil age. He has also written that, post-Brexit, the UK government should phase out subsidies to landowners unless they meet goals such as managing hill farms or looking after wildlife.
The review panel will also include: Terry Scuoler, CEO of UK engineering manufacturers confederation EEF; Nick Winser, chairman of the Energy Systems Catapult and a former director for 11 years of National Grid; Isobel Sheldon, engineering director of Johnson Matthey Battery Systems; Richard Nourse, managing partner of venture capital fund Greencoat Capital; and former parliamentarian Laura Sandys, CEO of consultancy Challenging Ideas.
Helm expressed delight at taking on the review and said it would “sort out the facts from the myths.” He said he would not provide advice to consultancies during the period of the review.
UK Energy Networks Association (ENA), which represents gas and power grid operators, welcomed the announcement of the Helm review. Its CEO David Smith said: "This review can bring transparency and clarity to the debate on energy costs and we look forward to contributing to that effort." Centrica boss Iain Conn last week blamed high network costs as one reason why it is hiking electricity charges, but ENA said at the time that was unfair.
Mark Smedley