February 8, 2012

KPMG Refuses to Publish Controversial Green Energy Report

KPMG is refusing to publish the full findings of a controversial study examining the cost of the government's green energy policies, which was originally used as a basis for a series of media reports attacking the cost of renewable energy.

The preliminary findings of the report, dubbed "Thinking about the Affordable," were made public last November.
They claimed Britain could meet its 2020 carbon reduction targets more cost effectively by building nuclear and gas-fired power stations instead of wind farms.

The report was seized on by critics of the government's green agenda and also formed the basis of a number of media reports, including a BBC Panorama special that attacked the cost of renewable energy subsidies. 

The preliminary findings of the report suggested the UK could save more than $50bn by ditching plans for a massive expansion in wind power capacity and instead focusing on nuclear and gas capacity.

It was the first of a series of studies that have been published during the last few months, claiming wind power is too unreliable and costly to provide an effective means of keeping the lights on while reducing carbon emissions.

Trade body RenewableUK slammed the KPMG study as inaccurate on the grounds it had failed to consider the full lifetime and operating costs of new conventional power plants. Green campaigners have also repeatedly called upon KPMG to publish the full version of the report and disclose its methodology.

But Sorrelle Cooper, a spokeswoman for KPMG, told BusinessGreen that the company had decided not to release the full report as researchers had deemed it was "ripe for misinterpretation".

Cooper acknowledged that a leaked press release, obtained by the Sunday Times, BBC's Panorama and BusinessGreen, had opened the study up to accusations of bias, which had also been a factor in the team's decision not to publish. Cooper also admitted there had been mishandling of the release of the report, maintaining that the draft press release had been leaked, although she refused to provide further details on how it had been made public.  She also maintained that KPMG had close ties with the green energy industry, was not "anti-wind" and had last week been involved in a major wind farm deal.

But a spokesman from RenewableUK said that while it had met with KPMG since the preliminary findings were published, it stood by its original concerns over the report's methodology. "We welcome the decision by KPMG not to release this report. The methodology they used did not properly compare with how power generation systems function in the real world," he said.

"KPMG needs to be made more aware of the benefits of wind energy. The cost is just $15 per household per year, according to the independent regulator Ofgem. Gas hit a three-year high of $1.20 per therm in Britain on February 3 as a result of the cold snap across Europe. We have to get off the fossil fuel hook to stop our energy bills escalating."

KPMG's reluctance to release the report will be seized on by green and renewable energy campaigners who have in recent months been forced to defend renewable energy policies from a series of reports about the cost of green energy, which they regard as misleading and inaccurate.

Renewable energy industry insiders expressed disappointment that KPMG was unwilling to release the controversial research, despite the fact that the preliminary findings had already been used to shape the current debate on energy policies. Critics are also likely to ask questions over the BBC's willingness to use an incomplete report as the basis for one of its flagship current affairs programmes.

The news will also provide a boost to incoming energy and climate change secretary Ed Davey, who has already been forced to defend the government's wind energy policies from a group of around 100 Conservative MPs who last week wrote to David Cameron complaining that support for wind farms is proving too costly. 

The news comes just days ahead of the broadcast of an ITN Tonight programme on the cost of green policies, due to air on Thursday 9 February, which has sparked fears among green groups that flagship renewable energy policies will again come under attack
Keith Allott, head of climate change, WWF-UK, said KPMG's decision provided further evidence that the cost of renewables was becoming an increasingly emotive issue. "The whole issue of energy bills and renewable energy has been whipped up into a media storm over recent months, with scant regard to the real evidence base," he said.

"The Daily Mail has run three corrections to lead articles which tried, erroneously, to blame green policies for the increase in consumer bills. KPMG's report led to a Sunday Times article and informed a very skewed BBC documentary on renewables, but now it seems that it may never see the light of day. We urgently need to inject some integrity and honesty back into this debate."

In related news, the BBC posted a clarification notice on its website last week about the controversial Panorama programme.

"While the film focussed on government energy policy going forward - and the associated costs - we feel it worth repeating that the rise in current energy bills is predominantly linked to the increase in winter gas prices," said the BBC in a statement. It added that it would have been "helpful" if this point had been made more clear to the audience.

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