Something very strange happened today. I sat down to listen to the radio, and happened upon “You and Yours” on BBC Radio 4. Often, the radio stays on for a few moments before being switched off again as I tire of being lectured by the BBC about climate change, diet, net zero, or any one of a number of variations on those themes. But not today. Instead, I listened with increasing incredulity, as the BBC allowed a viewpoint that has been missing from its TV and radio programmes and its website for a long, long time now. It was an interview with Professor Sir Dieter Helm about the costs and implications of the UK Government’s “net zero” policy, and it can be found on BBC Soundsi, with the interview starting at around 32 minutes 10 seconds (thank you, Richard Drake, for supplying the details during a discussion about this on Open Mic).
It went like this:
Winifred Robinson: Now it’s been a week since the huge rise in energy bills was announced by the regulator, OFGEM. From April the average bill in Britain will rise by 54%; that’s an increase of £693 a year for every household. In the past week, we’ve been hearing on this programme some detail about how the Government plans to cushion this blow with loans and discounts on our bills will work out in practice. But are high energy bills the new normal? Some people are warning that they are. And it’s because of the cost of cutting carbon emissions. Professor Sir Dieter Helm says that. He’s an economist at Oxford University. He’s advised the UK and European Governments on energy policy. He was knighted for services to the environment, energy and utilities policy. I started by asking him why he’s called the current spike in energy prices the first net zero energy crisis.
Professor Sir Dieter Helm: Well, there are two reasons at play here. The first is that transforming an economy which is overwhelmingly dependent on fossil fuels to one that going to be net zero by 2 50 [sic] and indeed the power sector, the electricity sector is supposed to be completely net zero by 2 35 [sic] in thirteen years is a massive task. And it’s quite naïve to believe that something on this scale could be done other than at considerable cost. We should do it, but it’s going to be expensive. And then there’s the particular issue which comes up now. Yes, gas prices have risen, but there’s a fundamental question as to why the rise in gas prices globally has hit the UK so badly and part of that is because we are extremely reliant on gas to back up the intermittent renewables, particularly the wind, and we haven’t thought through how to do the back-up bit, the security of supply bit, while we’ve been at the same time pursuing decarbonisation.
WR: So that’s why you’re not convinced, then, that even when this spike in gas prices on the wholesale market is done with, our energy bills will be cheaper?
DH: There’s a juggernaut of cost to come, even if gas prices fall back, and there’s no certainty they will, but they might. And if you look at that juggernaut, you can already see it in your bills. £250 is going just on the legacy costs for those renewables in the past, and there’s a lot more of those subsidies and supports to come. And we’ve got to find other ways of doing this and, I’m afraid, more expensive ones.
WR: You believe we’ve been peddled some myths about renewables paying for themselves, even maybe working out cheaper in the long run.
DH: They may well work out cheaper in the long run, but as the famous economist Maynard Keynes once said, in the long run we’re all dead. The question is what happens in the short run, and by that I mean, you know, the next 10, 15 years or so. And when someone puts out a press release which says, you know, new wind farm, enough, you know, to power 20,000 homes or whatever it is, they never say “when the wind blows”. So the critical thing about most of the renewables we’ve got – and we need these renewables – is that you need something else to back them up.
WR: How will we back them up?
DH: Well at the moment the answer’s gas, gas and more gas! Further out in the future there are lots of possibilities about batteries, about hydrogen, and other forms of storage. Lots of technologies are coming, but not any time soon. And that’s again why we have been hit so hard by these gas price rises. You know, most other countries kept their coal – a very bad idea for climate change reasons, but, you know, for example in Germany they’re burning their coal flat out. We rightly closed the coal but didn’t think through that this would make us more dependent on gas than most other countries. But going forward we are gonna have higher costs. We really do have to think through how people can pay, and who pays.
WR: What do you think should happen instead then? How will we pay for all those things that you’ve mentioned?
DH: Well, there’s no doubt that we’re gonna have to pay for quite a lot of this. But a lot of the costs, that 200, 250 quid on your bill now are the result of what I call legacy subsidies, and these subsidies were particularly high because we were trying to get the offshore wind industry going, for example. So I think those should be regarded more as kind of innovation funding or research and development funding. And those should be paid like other innovation strategies by the Treasury and by taxpayers. That’s what I would do now in the current price shock that people have got.
WR: We asked for a response by the Government about this. They told us, about the green levies that have been added to all our bills, and I’m quoting now: “Environmental and social policy costs currently represent around 12% of the average dual energy bill. However, over the past ten years their net effect has been to reduce consumer energy bills.” Is that true?
DH: Well, you can always come up with a hypothesis which would make that answer add up, but it doesn’t. It’s not true. And, erm, that’s because what they’re doing is just looking at the, er, direct costs of some of these – and even there it’s not really true – and they’re ignoring all the system implications of having that intermittency on the energy system more generally. They’re not looking at firm power, they’re looking at just the cost of, for example, the wind farm itself. And this is smoke and mirrors, and part of the general story that, you know, it’s all pretty cheap, it’s all gonna be very easy. And I think that’s not helpful. We have to explain to people why decarbonisation’s important, why we have a duty to do this, but be honest with them – it’s gonna cost. And not create this world in which they expect it to be cheap, and then suddenly they find they’re paying £2,000 a year.
WR: We’ve also been told that if we do cut carbon, we’ll avoid the costs that come with climate change, you know, the flooding, the storms, all that stuff. Is that true?
DH: It’s complete nonsense, right! You know, the UK is responsible for about 1% of global emissions. Climate change is going to be determined – and I set this out in my net zero book – it’s going to be determined in China, India and Africa. You know, China’s building more new coal-powered stations today than all the coal power stations being closed in the United States and Europe. And this is where future emissions are coming from, and the idea that if we in the UK stop producing carbon domestically in the UK that somehow we’re gonna solve the global problem of climate change, I’m afraid it’s much tougher than that. And so consumers are going to pay both the costs of mitigating emissions in the UK – which I think they should – and, however, they’re gonna have to face up to the costs of a warmer world. It’s going to be at least 2 degrees warmer, you know, the outcome’s pretty clear. And it may well be three or more degrees, and we’re gonna have to both adapt to climate change and face all the costs that go with that and pay for decarbonising our energy systems.
WR: That was Professor Sir Dieter Helm speaking to me this morning.
All of which made a very refreshing change. The question is, why did the BBC allow such views to be aired, especially when propounded by someone so authoritative? One theory might be that it was a response to an articleii today in the Telegraph by Matthew Lynn, headed “The BBC’s bias is making the energy crisis even worse – Broadcaster is pumping out a constant stream of anti-business propaganda”. It’s behind a paywall, but some of it, at least, was aimed at the BBC’s alleged bias in favour of “net zero”. On the other hand, it would have been a very rapid response to an article that appeared on the same day, so perhaps it was already planned.
If so, that might suggest that the BBC has seen the way the wind is blowing, and is recognising the increasing unpopularity of “net zero” as an expensive policy. Nailing the BBC’s colours firmly to that mast is perhaps starting to look like a less than sound policy.
And as Richard Drake speculates on Open Mic: “He does say we should decarbonise, including getting electricity generation to net zero by 2035….The acceptance of the goal of net zero would explain I think why the BBC consensus enforcers let this one through.”
Perhaps, then, the BBC has dipped its toe in the water of scepticism around net zero, while still burnishing its credentials about climate change. Although he bent over backwards to make it clear that renewables are expensive, unreliable and require back-up; that decarbonising the UK economy won’t prevent climate change; that other countries (notably Germany, China and India) are burning coal; and that we all need to get used to expensive energy (thanks to net zero) Professor Sir Dieter Helm did say quite a lot that fits the normal BBC agenda around climate change, e.g.:
Further out in the future there are lots of possibilities about batteries, about hydrogen, and other forms of storage. Lots of technologies are coming…
we need these renewables
most other countries kept their coal – a very bad idea for climate change reasons
We rightly closed the coal
We have to explain to people why decarbonisation’s important, why we have a duty to do this
It’s going to be at least 2 degrees warmer, you know, the outcome’s pretty clear. And it may well be three or more degrees…
There’s enough there to keep the BBC happy, which might explain, as Richard suggests, how this interview got past the BBC consensus enforcers. And it is interesting to see that it happened. Perhaps – just perhaps – the BBC has sensed that the times are changing. And perhaps – just perhaps – we might see a bit more of this over the weeks and months to come. Maybe it’s a straw in the wind.
Whatever the reason for it, the return of balance to the BBC is to be warmly welcomed.