How business savvy is DECC's new permanent secretary?
- 08 Jan 2013, 16:00
- Mat Hope
Source: Tax Credits
Stephen Lovegrove has been
appointed Permanent Secretary for the UK's Department of Energy
and Climate Change (DECC) after the Prime Minister intervened to
block the Secretary of State's preferred candidate, David Kennedy.
But does Lovegrove possess the background to help accelerate
investment from the private sector to get new energy initiatives
off the ground, as the PM hopes? We compare the two candidates'
One of the permanent secretary's main tasks will be to try and
attract investment in the UK's energy sector, while ensuring the
government gets a good deal.
The Prime Minister blocked Kennedy's appointment because he was
looking for someone with "commercial experience and the
ability to do deals" - something he felt Kennedy lacked. So is
Lovegrove a better candidate?
Lovegrove does have some experience working in the private sector
and of looking after government assets. Lovegrove has been Chief
Executive of the
Shareholder Executive within the
Department for Business, Innovation and Skills since 2007. The
Shareholder Executive is tasked with managing the government's
interventions in the private sector, including looking after the
businesses that the government has a stake in like Royal Mail and
the Post Office. Prior to that, he worked as a Head of the European
Media team at Deutsche
Bank for a decade and spent five years as a strategic
On the energy front, Lovegrove was briefly in charge of British
Nuclear Fuels before the government announced its disbandment in
2010. He was also in charge of
selling the government's stake in British Energy to EDF for
£4.4 billion in January 2010. This was actually 10
per cent more than his Shareholder Executive had valued it and
represented good business for the government. This seems to be the
extent of his experience in the energy sector - though the EDF deal
is no small point in his favour.
Kennedy, meanwhile, was a World Bank economist specialising in
energy strategy and investment prior to becoming Chief Executive of
the Committee on Climate
Change (CCC). Before that he worked at the European Bank for
Reconstruction and Development where he worked with central
Asian and eastern European countries. He also holds a PhD in
economics from the London
School of Economics.
When it comes to green credentials, Kennedy is well-known within
environmental circles as Chief Executive of the CCC, under which he
is tasked with advising the government on how best to achieve the
Climate Change Act's legally binding goals. Kennedy's opinions on
the role of natural gas in the UK's energy mix seem to diverge from
some sectors of the government, however. The PM recently told a
parliamentary committee he wanted the UK to be part of the
unconventional gas "revolution" he said is taking place across the
world. But Kennedy has said that the government should resist large
investment in gas power, saying a new dash for gas would
bust the UK's carbon budgets.
Kennedy may also have made himself unpopular
with some Conservative MPs due to his general support
for renewable technologies, including windfarms. Some
commentators believe that Kennedy's views on the UK's energy
strategy were the
most significant obstacle to his appointment as permanent
So is it all about business experience?
On reflection, it doesn't appear that Lovegrove has significantly
more commercial experience than Kennedy does, and Kennedy appears
to have the edge when it comes to times spent in the energy
industry. But while
influential Conservative MP Tim Yeo praised Kennedy for the way
"his intellectual rigour has won the support of both industry and
the green lobby", Kennedy's views on the UK energy mix may have
garnered opposition from the Conservative party.
In contrast, Lovegrove represents a safer choice in a department
fractured along party lines. Mending these rifts looks
set to be one of the new secretary's biggest challenges - just as
much, in fact, as securing the investment needed to enact the
revamp of the energy sector that the energy bill requires.