Dieter Helm

Dieter Helm

Background

One of the founders of the economic consultancy, Oxera. Helm is a non-executive director of Oxera Holdings Limited, parent company of Oxera Consulting Limited; a Director of Helm Associates Ltd; and a Fellow in Economics, New College, University of Oxford.

Influential Committees

Helm is on the Prime Minister's Council for Science and Technology, is the Chair of Defra's Academic Panel; as well as being on the DTI's Sustainable Energy Panel Advisory Board, and the Ministerial Task Force on Sustainable Development.

Influential Voice

Helm is a key advisor to the government on energy policy, and is said by government insiders to be close to Geoffrey Norris, Blair's key pro-nuclear advisor.

In 2002, the Planet Ark website reported how "A top academic [Helm] with influence in government said yesterday Britain should force consumers to buy nuclear power to save stricken generator British Energy and protect the struggling nuclear industry". In the article, Helm said that nuclear power should be treated like renewable energy and supported by government rules to create a guaranteed market.

Although Helm often appears to be technology neutral, he has put forward mechanisms which can be used to support nuclear power. His perspectives have been used by the pro-nuclear forces to argue their case. For example, the Nuclear Industry Association picked up on Helm's comments to the programme "If":

"Under the present arrangements no one is directly responsible for ensuring that the lights stay on. As Dieter Helm remarked at the conclusion of the film, 'If you want the lights to stay on, if you want security of supply, if you want what a modern economy needs you have to be absolutely clear what your priorities are, who has the right powers and how they will be exercised, then the market works. But we're a long way from that point yet, and that is the challenge that should be at the DTI's door morning noon and night.'

"In conjunction with the programme, which was watched by 2.8 million people, the BBC posed the question, 'Should Britain keep nuclear power?' on their website. The results shown here reveal that more people than might be expected are heeding 'the wake-up call'."

Criticising the MARKAL Model

Helm has undermined Government policy by criticising a key model which was, in part, used by the Government in its White Paper, "Our Energy Future: Creating a Low Carbon Economy." This tackled the question of how to achieve a 60 per cent reduction in carbon dioxide, which had been recommended by the Royal Commission on Environmental Pollution.

In his book, published the same year as the White Paper, called Energy, the State and the Market ^[1], Helm wrote that "The White Paper's development naturally focused on the question of how the 60 per cent CO2 target could be achieved. The basic choices the DTI identified in line with the earlier report by the PIU [Cabinet Office's Performance and Innovation Unit] were between the main carbon-free technologies (renewables, energy efficiency and nuclear) and market-based instruments (carbon taxes and emissions trading)

Helm points out that the DTI homed in on an implicit Plan A that renewables and energy efficiency would jointly be sufficient. Indeed the White Paper, that Helm labeled schizophrenic and naive, concluded: "although nuclear power produces no carbon dioxide, its current economics make new nuclear build an unattractive option and there are important issues of nuclear waste to be resolved. Against this background, we conclude it is right to concentrate our efforts on energy efficiency and renewables."

But what was the modeling of Plan A, in part based on? It was something called the MARKAL model, which Helm describes as a "fairly standard" bottom-up "garbage in, garbage- out" model.

At a seminar the following year, entitled "The Costs of Decommissioning and UK and Global Economies" at Imperial College, Helm was one of the speakers, and he continued his attack on the White Paper and MARKAL. His talk was called "making the facts fit the policy: a critique of the Energy White Paper."

Notes of the meeting record that Helm began by commenting that "if it sounds too good to be true, it probably is." The politicians has started from an answer that they "wanted to get" namely that a 60 per cent reduction target was possible without nuclear. Therefore the implication was that the White Paper had "underestimated" the costs of renewables and energy efficiency. In contrast, nuclear "would be a relatively cheap option."

The notes also record how "a lively discussion" followed Helm's presentation and a "number of contributors criticized Helm's critique of the MARKAL modeling."

One of those to criticize Helm was the Chair of the meeting Dr Paul Ekins, adviser to the Environmental Audit Committee of the House of Commons and a Member of the Royal Commission on Environmental Pollution.

Ekins wrote a "reflections" document that was circulated to delegates. In it, Ekins wrote that Helm "wishes it to be recorded that he does not agree with this account of his presentation. Indeed, he categorically rejects it. Obviously participants at the seminar will need to come to their own conclusions on this matter."

Ekins noted that Helm's thesis was that the White Paper was aimed at "making the facts fit the policy", which was a "serious allegation which, if true, would reflect badly on the commitment of government to evidence-based policy".

He argued that Helm's presentation essentially made two broad points: that the cost estimates were systematically too low; and that this was deliberate in order to justify policies that had already been decided on.

However, Ekins noted that “no direct evidence in support of his thesis was presented by Helm and concluded that "I have found no evidence at all that the costs calculations were carried out in order to arrive at certain pre-determined conclusions. That does not mean that such evidence does not exist. But it was not presented at the seminar and I have not become aware of any thereafter."

Why is this relevant to the current nuclear debate? Although Helm says he is technologically neutral, if someone attacks a model that promotes renewables and energy efficiency, by implication it undermines the scientific and political consensus for those technologies. By undermining the White Paper, Helm has made it more acceptable for the government to put forward another energy review. It has also made it easier for the pro-nuclear lobby to push their case and their arguments over cost.

Carbon Contracts - Nuclear's Trojan Horse

Antony Froggatt, an independent energy consultant calls Carbon Contracts the "Nuclear's Trojan Horse". He writes that "the nuclear industry and its supporters, including the European Commission, are attempting to re-brand the sector as a positive energy option, in particular by categorising itself, along with renewable energy, clean coal and/or Carbon Capture and Storage (CCS) as a "low carbon technology".

"The industry hopes that by gaining acceptance for this terminology and having it officially recognised as advantages for society, in the fight against climate change and security of supply, that nuclear will be given the same market benefits (guaranteed price schemes, exception from taxation) as renewables, while simultaneously continuing to receive its current subsidies "insurance cover, financing of waste schemes etc."

Helm has been at the forefront of pushing the concept of "carbon contracts" that he argues does not favour one technology over the other. Writes Helm: "Instead of supporting wind, clean-coal and /or nuclear through obligations or subsidies, CO2 can be directly addressed through carbon taxes or contracts".

Under any contract scheme the government would auction of carbon reduction contracts to the lowest bidder for a determined period of time. Helm argues that because the contracts tackle CO2 reductions, and not the technologies behind it, "they are technology blind so the government is not forced to pick winners."

However, Bridget Woodman and Catherine Mitchell from the Warwick Business School note that there might be a limit on the number of carbon contract allowances. If this happens “there is a risk that a few big projects "either nuclear of CCS (carbon capture and storage) could sweep up all the available contracts, leaving only crumbs for renewables or demand reduction." The nuclear industry, they argue, "finds the concept appealing."

So what Woodman and Mitchell are arguing is that although in theory carbon contracts should reward all low carbon options, in reality the emphasis will be on large scale generation, ie nuclear. Also providing long term carbon contracts will go a long way towards removing the investment uncertainty which has prevented new build so far. So although Helm argues that carbon contracts are "technology blind" the critics argue that they in effect favour nuclear.

The Nuclear Conference Circuit

Helm was also due to speak at a BNES event in March 2006, called "Securing the Future - The Role of Nuclear Energy". Other speakers on his panel included Roger Ewart-Smith, from N M Rothschild; Mike Weightman, from the NII; and James Lovelock. The Conference was sponsored by the World Nuclear Association, Nuclear Industry Association, and UKAEA and co-organised by the Institution of Nuclear Engineers.

He was also due to speak at the Adam Smith Institute's inaugural "Nuclear Industry Forum" in May 2006 along with, amongst others:

• Vincent de Rivaz, CEO, EDF Energy
• Vincent Maurel, Member of the Executive Board, President & CEO of Framatome ANP, Areva
• Andrew Duff, CEO, RWE nPower
• Bill Coley, CEO, British Energy
• Sir David King, Chief Scientific Advisor, HM Government
• Jake Ulrich, Managing Director, Centrica Energy
• Lauri Piekkari, Vice President Finance, TVO
• Chris Murray, Chief Executive, Nirex
• Roger Ewart-Smith, Managing Director, Rothschild
• Dr Sue Ion, President, BNES

Subect to A Complaint And Asked to Be Removed

NuclearSpin has received a request to remove this entry from the website. Some of the wording has been changed to clarify the expressed concerns.