Energy

  • Publications by Dieter Helm

    The new normal: oil prices after the crash

    9th February 2016

    They did not see it coming and ever since the oil price started its precipitous crash from the $100 level, they have been reeling. The “they” includes investors, company directors and the resource-cursed governments. At first, they expected it to be a temporary and limited correction, settling at a new “more sustainable” level of around $70-80. As 2015 progressed, it was expected to be around $60, then $50-60, and now $40. Oil company executives predicted the prices would stabilise at every...

    Energy

  • Publications by Dieter Helm

    Stranded Assets - a deceptively simple and flawed idea

    22nd October 2015

    The stranded assets argument has an elegant simplicity. Start with a maximum of 2 degrees warming. Work backwards to the total amount of additional carbon dioxide that can be emitted, consistent with this constraint. Compare this with the booked reserves of the fossil fuel companies, and then identify the excess over the constraint as “stranded assets”. As far as it goes is fine. But that is not very far. It does not tell us anything useful about the value of the oil, gas and coal companies....

    Energy

  • Publications by Dieter Helm

    Reforming the FiTs and capacity mechanisms: the 2-stage capacity auction

    3rd September 2015

    Back in 2010, as Energy Market Reform (EMR) was getting going, I proposed a 2-stage auction as a way of combining mechanisms for meeting the carbon targets with the maintenance of a sufficient security margin. The first stage would be open to all, and the second constrained to meet the carbon budget if necessary, and if the carbon price is insufficient. Instead, EMR followed a complex path, with Feed-in-Tariffs (FiTs) to replace the Renewable Obligation Certificates, limited by the Levy...

    Energy

  • Publications by Dieter Helm

    The first 100 days of Conservative energy policy

    24th August 2015

    Amber Rudd, the Secretary of State for Energy and Climate Change, has had a very busy start. She has ended new subsidies for onshore wind, reined back the Green Deal, removed the exemption from tax for renewables, ended the zero-carbon homes plan, removed guaranteed subsidy for biomass, borne down on solar PV subsidies, speeded up the rules on fracking planning process, and at the same time fully come in behind the Paris climate negotiations and the UK’s commitment to tackling carbon emissions...

    Energy

  • Publications by Dieter Helm

    Penalty tariffs, open-ended regulation and embedding overcharging

    20th July 2015

    When, in the face of the sustained attacks from Labour’s Ed Miliband and Caroline Flint, OFGEM referred the electricity industry to the Competition and Markets Authority (CMA), many hoped the result would settle the controversies once and for all, restoring trust and putting the industry on firmer foundations. The CMA has now spent a year investigating the electricity market, and come up with its preliminary findings, and proposed remedies. Unfortunately these fail to convince on most fronts:...

    Energy

  • Presentations by Dieter Helm

    What will the energy market look like after the CMA inquiry?

    26th March 2015

    Presentation for the Future of Utilities conference on the 26th March 2015. What will the energy market look like after the CMA inquiry?

    Energy

  • Publications by Dieter Helm

    The Coalition Effect - Energy Policy and the Coalition

    26th March 2015

    The Coalition came to power with a ready-made energy policy developed under Labour. The Secretary of State was Ed Miliband, and his policy as it played out under the Coalition was to prove the basis of a return to a level of state intervention not seen since the days of the CEGB, British Gas and the nationalised industries. By the general election in 2015, the almost complete U-turn had been completed, abandoning most of the liberalised and competitive structures that had been the hallmark of...

    Energy

  • Publications by Dieter Helm

    What should oil companies do about climate change?

    26th February 2015

    Imagine you are chief executive of a major oil company. Your economic forecasts tell you that the world remains stubbornly on a fossil fuel path for decades to come. The world is going to need you. But your forecasts also tell you that the result will be emissions that push up way beyond the level that your scientists tell you will limit global warming to two degrees. The world is on a path to burn all the oil you can find, and your oil will contribute to serious global warming. What do you do

    Energy

  • Publications by Dieter Helm

    The road to re-regulation

    12th January 2015

    The Labour Party has followed up its manifesto promise to freeze prices for 20 months if they win the General Election in May with a proposal for legislation now. Ed Miliband says: "We're going to bring before the House of Commons a vote in Parliament to say the government should bring forward fast-track legislation to ensure that we give the regulator...the power to cut prices." He is not alone. George Osborne has demanded falls in fossil fuel prices feed through to electricity customers, the...

    Energy

  • Publications by Dieter Helm

    The price of oil

    3rd December 2014

    The recent falls in oil prices have come as a shock to many. Only a few months ago, the IEA and many other mainstream forecasters predicted the price would gradually go up. This fitted with the political assumptions that lay behind the dash for wind and current generation solar across Europe, and the Energiewende in Germany. Suddenly it is all change. Even the IEA has changed its tune. Europe’s dependency on Russia looks less worrying, whereas oil (and gas) producers like Russia are in real...

    Energy