Net Zero to add £900 to cost of living by 2030

Ed Miliband’s Clean Power 2030 plan will add at least £25 billion per year to the cost of the electricity system, a report by Net Zero Watch has revealed. This will cause prices to soar, hitting every household in the UK with a cost-of-living increase of over £900. This in stark contrast to Labour’s pre-election promises that their clean energy strategy would reduce household energy bills by £300 per year.

The figures are the work of Professor Gordon Hughes, one of the UK’s leading energy system experts and comes after Mr Miliband cancelled a similar costing exercise commissioned by his predecessor Claire Coutinho.

Professor Hughes has found that Mr Miliband’s plans will increase the cost of almost every aspect of the electricity system, including the direct cost of power generation, capacity levies and system balancing costs. Increasing scarcity of carbon emissions permits will drive the costs up even further.

Professor Hughes said:

“While Mr Miliband’s department have resolutely refused to put a cost on the Net Zero grid, it is vital that we understand the direction he is taking us. The plan is clearly unaffordable.”

Professor Hughes estimates costs of key elements of the electricity system for two different electricity systems: the system in the Clean Power 2030 plan and the current system. It is not possible to model every element of the system, so the estimate should be viewed as conservative.

In delivering the electricity demand predicted for 2030, the 2024 system will cost £58.9m per year, whereas the current system would only cost £34.1bnm, a difference of £24.8bn. In per-unit terms, the 2024 system would be at least 7.5p/kWh (£75/MWh) more expensive.

Notably, the cost of balancing the grid – mostly payments to windfarms to switch off – would be £4 billion higher.

Many of us have long warned that the cost of decarbonising the energy grid would far exceed any of the publicised estimates that Milliband or his party have falsely claimed in the past. True estimates have been hard to quantify, because it is a gargantuan undertaking, the like of which has no precedent. So is it any surprise that Milliband’s sums don’t add up?

Labour lied to us in the run-up to the election, claiming that this costly act of self-harm would somehow make us all better off. I expect more and more expert reports to come out in the coming years exposing Labour’s huge under-estimation of the cost of decarbonisation. The people who will really suffer from Red Ed’s mad rush to net zero are the people, who will see their energy bills continue to soar as more and more green subsidies are levied onto their bills to fund his green power revolution. No doubt government subsidies will be needed for decades to come in order to keep bills affordable for average homes, and who will fund those subsidies… us, the taxpayer.

The only cause for hope are the rumours that Milliband could lose his role as Energy Secretary in an expected cabinet re-shuffle due to take place in the Spring. The word on the grapevine is that Starmer is set to prioritise economic growth over net zero, a sensible move that would be welcomed by the majority of people. Ed Milliband could be the most high-profile casualty of this change in ethos. We can only hope.