By Paul Homewood
Image may be NSFW.
Clik here to view.
Labour’s campaign centrepiece could prove to be a load of hot air
Labour’s pledge to cut consumer energy bills by £300 was an election campaign centrepiece. Yet the promise began to unravel this week even as it was launching Great British Energy – its flagship project aimed at achieving lower bills.
During the election campaign, Sir Keir Starmer and Ed Miliband, the Energy Secretary, repeatedly said their controversial plan to decarbonise UK electricity by 2030 would reduce household bills by £300.
But when challenged in the Commons on Friday and in interviews, both men refused to repeat the pledge. Miliband admitted that any reduction might take years to deliver.
“As we build new onshore wind, new solar, we’ll start to see the effect on bills,” was all Miliband would say, “but there are lots of things going on here. So our exposure to gas prices, which are set internationally, is something I don’t control”.
The tacit admission that Labour cannot really exercise the kind of control over prices claimed during the election will infuriate politicians and many voters, particularly given it coincided with the launch of Great British Energy.
The new state-owned enterprise plans to controversially roll-out huge numbers of new wind turbines as part of efforts to decarbonise the grid.
Many industry experts see the softening in Labour’s claims as a welcome dose of realism.
Leading analysts such as Cornwall Insight have long been cautious about the £300 target and about Miliband’s wider pledge to decarbonise UK power by 2030.
Cornwall’s latest forecasts suggest solar, onshore and offshore wind will produce just 44pc of Great Britain’s electricity by 2030. This is far short of the 67pc needed for a fully decarbonised electricity system.
What would it cost to meet the 2030 target? A whopping £48bn – on top of the £18bn already allocated, Cornwall calculates. It is taxpayers who will ultimately bear that cost, through bills or otherwise.
Tom Edwards, principal modeller at Cornwall Insight, believes the Government needs to find a great deal more money than it has so far allocated if it is to decarbonise the UK electricity system by 2030.
“The gap between our current trajectory and the new government’s 2030 target is substantial,” he says. “Without significant intervention, we risk falling far short of the decarbonisation goals.”
Providers who invest in infrastructure will expect a decent return – all of which will be loaded on to consumer bills.
It’s difficult to square those extra costs with cutting bills by £300 – so where did that claim even come from?
The answer is that it was based on a report published last October by Ember, a pressure group campaigning on climate change and clean energy.
It means a key plank of Labour election pledges and policy is based on an analysis by climate campaigners – something energy experts find hard to reconcile with sober policymaking.
Dr Jack Sharples, a senior fellow at the Oxford Institute for Energy Studies, points out that the pledge to cut household bills by £300 was conspicuously absent from the GB Energy “founding statement” and accompanying press release published this week by Miliband.
“The plan to reduce ‘household bills’ via GB Energy is a plan to reduce household electricity bills, by decarbonising the UK electricity grid by 2030. That would mean gas prices were no longer driving UK electricity prices in the UK,” he says.
Surprisingly the author still does not appear to know that wind and solar are much dearer than gas power anyway!