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KPMG: we don't want our renewables report to be misunderstood

  • 07 Feb 2012, 15:35
  • Christian Hunt

Remember the KPMG report which suggested that the Government's renewables programme is adding an "additional £34bn" to the cost of energy? It was trailed in a major article in the Sunday Times back in November, and cited prominently in an episode of Panorama which aired the next day.

Both said that the report would be published within days - but that schedule kept slipping, and the website BusinessGreen has revealed today that KPMG have finally admitted that the report will never be published.

The first mention of the research was a Sunday Times article headlined

Ditching wind farms 'will save £34bn'; A new study says Britain can hit its carbon targets more cheaply with gas and nuclear power.

It began:

A controversial report by KPMG, the accountants and adviser on government energy policy, will this week say that Britain can reach the 2020 target on reducing pollution imposed by the European Union for a third less than predicted, a potential saving of £34 billion.

To do so, says the report, entitled Thinking About the Affordable, the proportion of wind power envisaged in the current plan would need to be slashed and the energy shortfall made up by new gas-powered stations and nuclear reactors.

A day later the figures from the report were used prominently in an episode of Panorama entitled "What's fuelling your energy bill", which ended up concluding - on the strength of the KPMG work - that

"by moving rapidly from coal to gas and growing wind more slowly, we could meet our carbon targets, but save the public 34 billion pounds, saving the world for less".

KPMG however seemed less confident in the findings than the journalists were. When we tried to get a copy of the report, we were told that the Sunday Times story was based on "preliminary findings" and "...the full report itself is still being written". Meanwhile KPMG told BusinessGreen that the company was aiming to release the report at the end of the year, arguing that

"Due to the technical nature of the report were are trying to make sure we get it totally right so we can publish it and allow people to examine it and criticise at will."

Oddly, BusinessGreen also got hold of a draft press release from KPMG which had been doing the rounds, complete with an impressive level of detail, including additional numbers, lengthy quotes and bar charts.

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

"The assumptions and parameters used in the model - which examined the investment and lifetime costs of different energy generation sources - produced large swings in the financial outcomes," she explained.

"To avoid any misinterpretation we have decided not to publish any findings, although we are discussing our analysis with interested clients and stakeholders in the energy industry."

She added that

"Unfortunately things do get boiled down into a headline and the findings are too complex for that," she said.

This might have been a strong argument a few months ago, before the report had been highlighted by a Sunday newspaper and the BBC's flagship investigative programme. Coming two months after the report has made headlines, it doesn't really sound so convincing. The only way those figures, which are already in the public domain, can be interrogated is if the work behind them is made public.

At the moment, it seems pretty mystifying that a reputable firm like KPMG would be briefing the Sunday Times and the BBC's Panorama about inconclusive research, which they've subsequently prevaricated over for three months and then disowned.

Without the report being published - in whatever form - it's impossible to understand the calculations and assumptions behind its headlines.

UPDATE 16:00 7th Feb: It appears that a week ago Panorama have published a 'clarification' to "What's fuelling your energy bill". The clarification recognises that "the rise in current energy bills is predominantly linked to the increase in winter gas prices", referencing figures from Ofgem.  

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