Government’s preferred choice of Oxford economist Dieter Helm is controversial owing to criticism of wind and solar power

This article is more than 3 years old

This article is more than 3 years old

An academic who is a vocal critic of the price of renewable power is the government’s preferred choice to head a review of the financial cost of energy in the UK.

Dieter Helm, an economist at the University of Oxford, has been chosen by the Department for Business, Energy and Industrial Strategy (BEIS) to carry out the review, the Guardian has learned. The Conservative manifesto promised that the resulting report would be the first step towards “competitive and affordable energy costs”.

Theresa May is among those in the government taking an interest in the cost-of-energy review, which will examine how power prices can be kept down while meeting the UK’s carbon targets and keeping the lights on.

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But the choice of Helm, author of a new book on the slow demise of oil companies in the face of energy trends, will be controversial in some quarters because of his criticism of wind and solar power.

While acknowledging that renewables are remaking the energy landscape, the professor of energy has criticised the cost of today’s windfarms and solar technology, calling them “expensive” and highlighting the “sheer cost” of electricity generated from renewable sources.

Helm has also suggested the existing generation of green energy is not enough to significantly cut emissions. “Current renewables like wind turbines, rooftop solar and biomass stand no serious chance of making much difference to decarbonisation. It’s simply a matter of scale,” he wrote in the Spectator magazine.

Instead, Helm believes funding should be directed at next generation renewable technologies, such as more efficient solar panels. He also backs emerging technologies such as smart grids and battery storage.

Hannah Martin, head of energy at Greenpeace UK, said: “Dieter has a well-known preference for gas and has historically failed to grasp the full potential of renewables.

“At a time when the costs of offshore wind and solar are plummeting this review needs somebody with the vision to grasp the opportunities offered by clean energy to provide jobs, lower bills and slash carbon pollution.”

Other figures believed to have been in the frame for the job included Lord Turner, the former chair of a government advisory body, the Committee on Climate Change, who recently told the Guardian that Tory policy on onshore wind power was endangering cheap energy in the UK.

However, concerns that the review might be tilted against renewables could be allayed by Helm’s choice of colleagues to work on the report.

The Guardian understands that he will be aided by a former boss of the National Grid, Steve Holliday, who is a proponent of decentralised energy including batteries, and Richard Nourse of Greencoat Capital, an investment fund supporting clean energy.

Rounding out the proposed team would be Jim Gao, an engineer at an artificial intelligence company, Deepmind, owned by Google, which has been an enthusiastic supporter of renewables.

The review will look at all aspects of the energy industry and how they contribute to the cost of electricity, such as new technologies including the rollout of smart meters in millions of homes and the increasing number of electric cars drawing power from the grid.

At the heart of the review will be the challenge of addressing the energy trilemma: balancing the UK’s binding carbon targets with affordability and security of supply.

The Conservative manifesto said the review would “be asked to make recommendations as to how we can ensure UK energy costs are as low as possible, while ensuring a reliable supply and allowing us to meet our 2050 carbon reduction objective. Our ambition is that the UK should have the lowest energy costs in Europe, both for households and businesses.”

The review is due to report its findings to the business secretary, Greg Clark, in the autumn, and is expected to inform the government’s long-term approach to power generation.

Helm is also a strong critic of the cost of nuclear power, saying that just to get to the “starting line” of building a new atomic power station in the UK involves a “lengthy, complex and expensive process”.

He has also questioned whether any more new nuclear power plants will be built in the UK after Hinkley Point C in Somerset, which the public spending watchdog recently described as a “risky and expensive project”.

The new energy minister, Richard Harrington, has said the government is still committed to a new generation of nuclear power stations but Helm’s review could provide a justification for abandoning that ambition on cost grounds.

If nuclear and renewables fell out of favour in future government policy, that would leave gas as the only large-scale option for new power, given ministers are committed to phasing out coal.

Although Helm told the Guardian he had not been appointed to the role, it is understood he is the government’s preferred choice.

While a round of price hikes by energy suppliers last winter led to calls for a cap on prices, the average household bill of £1,160 in 2016 was below 2008 levels because of energy efficiency measures and falling energy demand.

The Committee on Climate Change also concluded this year that British households’ energy costs were not high compared with the rest of Europe.

A BEIS spokesman said: “As committed to in the industrial strategy green paper, we will commission a review to ensure energy costs are as low as possible while meeting our climate change targets. No decision has been taken on who will undertake this review.”

