In a paper criticizing the UK energy policy, Professor Dieter Helm proposes for DECC to avoid supporting expensive projects such as tidal lagoons, and to focus on other energy efficiency programmes.
The paper ‘British energy policy – what happens next?’ analyzes the British energy policy, and offers propositions for simplifying the UK energy market reforms.
“Picking new ‘winners’ can be avoided. This might start with the lagoon – which looks like being so expensive as to make even offshore wind look cheap – and move on to stopping even more offshore wind farms being built.
“Rudd could get on with the cheaper stuff quickly – closing the coal, and keeping the gas-fired power stations in business for the next decade,” Helm writes in the paper.
UK Secretary of State, Amber Rudd, has granted the planning consent for the construction of the world’s first tidal lagoon in Swansea Bay on June 9, 2015. The cost of 320 MW tidal lagoon project is estimated to be £1 bln.
Professor Dieter Helm also suggests that DECC should replace Contracts for Difference (CFD) policy with fixed priced contracts deeming CFDs as ‘unnecessary complexity’.
The fixed price contracts would, as Dieter Helm writes, result in renewables competing with each other, what would consequently result in the elimination of expensive offshore wind.
“Forcing the renewables to bid against each other would wipe out the extremely expensive offshore wind. Coal to gas would probably beat nuclear, and the tidal lagoon would be literally for the birds in the Severn Estuary,” it is stated in the paper.
Dieter Helm is an economist specialising in utilities, infrastructure, regulation and the environment, and concentrating on the energy, water, communications and transport sectors primarily in Britain and Europe. He is a Professor at the University of Oxford.
During 2011, Dieter assisted the European Commission in preparing the Energy Roadmap 2050, serving both as a special advisor to the European Commissioner for Energy and as Chairman of the Ad Hoc Advisory Group on the Roadmap.
Image: twitter/Prof Dieter Helm CBE