Former energy minister confident cost review will deliver

Charles Hendry supports limited scope of Dieter Helm-led energy review

Former energy minister Charles Hendry has said he is confident that the independent cost of energy review can achieve its aims of reducing consumers’ bills and reforming regulations.

Hendry, a Conservative who was a minister at the Department of Energy and Climate Change between 2010 and 2012 in the then coalition administration, said: “I see the review as being one part, albeit an important part, of creating a more complete understanding of the cost of electricity, and what can be done to bring bills down. It should be welcomed in that regard and completed as soon as is practicable.”

He also backed the review’s focus on electricity, arguing that the issues that contribute to the size of consumers’ gas bills are different from those which determine spending on electricity. Furthermore, he pointed out, electricity bills affect all households, while gas bills do not.

There have been concerns raised over the exclusion of smart meters from the Dieter Helm-led review, but Hendry supported the decision

“It is quite right to exclude smart meters,” he told Utility Week. “Whilst the installation programme results in an extra cost on consumer bills, once installed consumers should be able to use the smart meter to reduce their overall bills, so the impact is different from house to house.”

Hendry added that variations in how households consume energy would make it difficult to focus on energy efficiency in a review of this nature. He argued that it is more useful to look at supply instead of demand.

Asked how much of the review’s findings might translate into policy, Hendry replied: “Any such independent review is advisory for the government. The government needs to consider its findings alongside its other policy commitments and priorities, so I would expect the review to ‘shape’ policy but not necessarily to ‘determine’ it.

“The final policy decisions need to be taken by ministers who are accountable to Parliament and the electorate, but this review will ensure that those decisions are based on as much evidence as possible.”

There have also been concerns raised over the limited time over which the review will run but Hendry said that three months would be sufficient to produce useful results. 

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