'There was a time when you couldn't talk about nuclear power at dinner parties'
Tim Stone's enthusiasm for energy is infectious. Mark Leftly talks to the KPMG boss who wants to be – a Beach Boy
Sunday 02 November 2008
A 57-year-old Oxford-educated chemist is as giddy as a schoolboy when Brian Wilson, of Beach Boys fame, launches into yet another hit. The man turns to his son, who has taken him to the concert for his birthday, and blurts out: "That's what I want to do when I grow up."
Dr Tim Stone is one of life's enthusiasts. Paul Lester, chief executive at FTSE250 support services group VT, says: "You can't help but get enthusiastic too when Tim's talking about something, it's infectious." More important is a fierce intelligence: "He's extremely knowledgeable about nuclear, defence and the private finance initiative (PFI). Tim has a big brain and can absorb enormous amounts of data and process it – and that's why governments like him."
Dr Stone is chairman of the global infrastructure and projects group at KPMG, one of the big four accountants. The awkward title fails to hint at Dr Stone's influence. For more than a decade, he has been at the heart of government thinking, helping to develop key policy initiatives. At present, he is seconded, one and a half days a week, to the Government as its nuclear adviser, and, so, is the man who will set up the framework to deliver the ambitious reactor roll-out programme. Sources say that his "fingerprints are all over" the Government's £5.2bn-a-year plan to rebuild every secondary school in the country, while he has helped develop many of the PFI models that critics say amount to privatisation.
Despite relaying rock star ambitions to his son, Dr Stone is not a showman. He tends to work his way through the complex webs of government and private-sector relationships through his thick contacts book. Ask anyone involved in the bidding for a government contract whether they know Dr Stone, and the answer is typically a smile and a "yes".
"I'm having a whale of a time with my mixture of day jobs," he beams, on the fifth floor of KPMG's central London offices. He seems to be hinting that he would very much like his two-year nuclear secondment, due to finish in January, to be extended. This is a likely scenario given that the nuclear programme is at a crunch point. EDF, the French power giant, has just bought British Energy for £12.4bn, meaning that it can use its nuclear expertise to develop sites across the country by 2017 – the date that the Government wants the first of the new plants operational. The Climate Change Bill, passed last month, commits the Government to cutting carbon emissions by 80 per cent by 2050, which makes nuclear power more essential.
"Nuclear is the only low-carbon form of baseload that we have," says Dr Stone, meaning that nuclear plants provide a constant supply of electricity, 24/7. Tidal power, for example, produces peaks of electricity twice a day. This means nuclear power is the only guaranteed way to constantly provide clean energy. There are plenty who oppose Dr Stone's reasoning, but he thinks there is a greater acceptance of the nuclear industry than even just two to three years ago. "There was a time that nuclear power was treated like politics, money and religion at dinner parties – you couldn't talk about it. Now people do."
The fear of the "n" word meant that the solution to hitting low carbon targets "was staring us in the face – though that's easy to say with 20:20 hindsight".
The Government has never said how many nuclear plants it wants built, making it clear that the market should decide, with operators going to ministers when they have identified suitable sites to develop them. However, it's thought that John Hutton, the former Business Secretary who led the nuclear programme until it was moved to Ed Miliband at the newly created energy and climate change department last month, envisaged 10 to 15 plants as possible. To hit an 80 per cent carbon reduction target could take up to double that, according to some industry sources.
While Dr Stone won't be drawn on government projections, he does admit to hoping that nuclear operators will have come up with plant plans early next year. "I would hope that at least two operators with identified sites should have come forward by Easter, although one more than that would be very good news," he says.
EDF is bound to be one of those operators. The British Energy deal, which is still subject to European Union competition approval, should see EDF build four reactors. The French company would like to develop the reactors at Hinkley Point in Somerset and at Sizewell in Suffolk, which are existing British Energy nuclear sites.
Although Dr Stone clearly loves his secondment – he broke his foot while photographing the engine room of a nuclear-powered ice breaker while on holiday in the North Pole – his time is divided. He is a non-executive board member of the European Investment Bank, which in typical wide-eyed fashion he describes as "a magical institution", and recently took on an advisory role with the Welsh Assembly.
In Wales, Dr Stone heads up the Strategic Capital Investment Advisory Panel, which will help Welsh leaders spend about £400m in capital projects over the next three years. "We'll be looking at investing in projects that help to deliver bigger policy objectives," he says, giving little away. This takes him back towards his PFI roots. The PFI typically sees the private sector build, run and maintain public assets such as schools and hospitals over, say, 30 years. The private sector pays for the project, and the Government pays it back over the contract length.
Known as one of the great sages of the PFI, Dr Stone has been trying to develop the model so that more complex but effective partnerships can be made between government and companies. However, he concedes that the bank loans the private sector needs to fund the projects have simply dried up in the credit crunch. "I don't think we'll see banks lending on projects in large volumes for quite some time – three, four, maybe five years," he sighs.
This is possibly the only time that Dr Stone speaks with an air of resignation, though he soon gets excited that PFI was a mere "pilot" and that the Government must now look at ways of developing that model to deliver wider public-service reform benefits. He's clearly processing a lot of information at once, running numerous ideas through his mind. It's a little confusing, but Mr Lester was right: Dr Stone's enthusiasm is infectious. And maybe that's the real reason governments like having him around.
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