Clark should “reset” balance between market and state in energy sector

Oxford Economist Dieter Helm has said that Business and Energy Secretary Greg Clark, needs to “reset the balance between the market and the state and [avoid] more patching up of what he has inherited.” He further added that the energy sector is “not in good shape”. He added that the growing electricity demand as heat and energy are electrified will “make the current capacity margin of roughly zero even more alarming that it is now.” Helm’s view is that the phasing out of coal-fired power stations and the reduction in the lifespan of the nuclear fleet mean problems faced by the new Secretary are “all about to get worse- much worse.” He warned:

“Onshore wind has had to be capped; offshore wind propped up; nuclear has required a special deal; and now gas needed a capacity market. Britain has now comprehensively re-nationalised its energy policy. In many respects, Greg Clark as much control as the Central Electricity Generating Board once had. The current subsidy regime is not, as the government claims, technologically neutral. If it was, there would be no offshore wind, and no Hinkley.” Helm has called for Clark to make policy amendments. He suggested a free-ranging carbon price to confront consumers and businesses with the cost of their pollution. He advised a full and comprehensive energy policy was needed to set out “the principles, the overarching policies and the direction of travel. The current state of the energy sector is sufficiently serious to merit rapid action. He [Clark] cannot engage in the luxury of reviews and reports. He needs to act.”