On 6 August 2017, the Department for Business, Energy and Industrial Strategy (BEIS) announced an independent review of energy costs. The review is to be led by Professor Dieter Helm CBE, one of Britain’s leading energy experts. The Helm Review is the latest in a growing list of political and regulatory interventions in the energy sector. It seems unlikely to be the last.
What will the Helm Review cover?
Building on the commitments made in BEIS’s Industrial Strategy Green Paper published in January 2017, the Helm Review will investigate how the energy industry, government and regulators can achieve BEIS’s overarching objectives – low energy costs and ensuring security of supplies, whilst meeting the UK’s domestic and international climate targets in the most cost-effective way. The review will, amongst other things, consider:
Professor Helm has welcomed the opportunity to conduct this review and pledged to “sort out the facts from the myths about the cost of energy, and make recommendations about how to more effectively achieve the overall objectives”.
However, the Helm Review has prompted a mixed response. While some commentators welcome the opportunity for greater transparency and savings, others fear that Government is kicking any decisions further into the long grass.
Energy market in the spotlight again
The Helm Review – launched days after British Gas’s announcement to increase its electricity prices by 12.5% from September 2017 – is the latest in a line of interventions, studies and reforms in the energy sector:
Outside energy-specific developments, it is also difficult to separate the review from the Government’s wider “whole economy” proposals. For example, in September 2016, in the context of granting approval to the development of Hinkley Point C nuclear power station, the Government announced plans to introduce new controls over foreign investment in the UK’s “critical infrastructure” (see BLP article Hinkley, golden shares and protectionist time travel?). Whilst it is clear that the meaning of “critical infrastructure” includes nuclear energy, it remains to be seen if the definition will extend to other forms of energy generation and delivery infrastructure, and, therefore, the extent to which measures such as these will have a disproportionate effect on the energy sector and energy costs.
The Helm Review is expected to report by the end of October 2017. It is not yet clear whether this will be the last – or simply the latest – in a series of such reviews.
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