Claire Coutinho is Shadow Energy Secretary, former Secretary of State for Energy and Net Zero, and current MP for East Surrey.
Donald Trump’s re-election should be a warning to politicians who put their faith in inflationary green borrowing and who do not prioritise cheap power for their people.
It comes at an awkward time for the Labour Party as the National Energy System Operator (NESO) finally published their analysis of Ed Miliband’s ‘Clean Power 2030’ project – his plan to decarbonise the electricity grid in just five years’ time.
Ed spent the election promising voters he would cut their bills by £300 by 2030. However, just a few weeks ago he ordered Labour MPs to vote against my amendment to hold him accountable to his own pledge. The NESO report explains why. The report states that even with a ‘Herculean effort’, in the words of the NESO’s Chief Executive, the overall cost of a Clean Power system – costs which feed into bills – are “no higher” than if we carried on as we are.
This would be a far cry from the £300 off bills that voters were promised.
However, even to achieve this we would first need to build twice as many pylons and cables in the next five years as we have built in the last decade, with every single project built on time. If that hurdle is missed, consumers would pay billions of pounds for wind farms to switch off and sit motionless because the grid cannot transmit the electricity they would otherwise be generating. Second, we would need to contract as much offshore wind in the next one to two years as in the last six combined, double our capacity of onshore wind, and triple the number of solar farms. If this huge increase in demand pushes up prices, that would also end up on bills through green levies – which the IFS now predict will rise by £120 per household by 2029.
Let’s be optimistic and say we can build everything on time, despite going at a speed never before seen in this country, and while battling with global supply constraints. Even then, there’s an elephant in the room. The NESO have calculated how much they think a ‘Clean Power’ system would cost compared to a ‘status quo’ system where we don’t build as many renewables and continue using gas to generate reliable power.
To do so, they had to make assumptions about what gas prices and ‘carbon prices’ – a cost generators must pay to offset the pollution impact of burning fossil fuels – will look like in 2030.
Bizarrely, the report has assumed that in 2030, gas prices will be 40 per cent higher and carbon prices will be 70 per cent higher than assumptions produced by Ed’s own department. This is nothing less than statistical gerrymandering. The true contrast could be even starker as the global energy watchdog, the IEA, has predicted that gas prices will fall due to an oversupply and “fierce competition” between suppliers. This may be spurred on further by a President-elect determined to make the most of US gas exports.
Ed Miliband must immediately re-commission these systems costs using more reasonable assumptions so we can get a true sense of how expensive he’s about to make our energy. Perhaps this is all worth it anyway if it buys us energy security? Maybe consumers would pay up to get off ‘volatile fossil fuel pricing’, as Ed likes to say?
However, the NESO report shows us that Ed’s target would do no such thing. The NESO sets out two pathways to achieve Clean Power 2030. In the first, the cost of gas would still set the price of the system half of the time. In the other, gas sets the price 15% of the time, but it would also require a fivefold increase in the level of ‘demand flexibility’ in our system – where we prevent blackouts by asking or paying households to stop using energy to stop the system from being overloaded.
This is perhaps the most alarming part of the report.
In the last couple of weeks we have seen a period of very little wind and sun. The intermittent nature of renewable energy means that despite having 30GW of installed wind capacity in Britain, at times it has been producing less than 1GW of electricity. Ed might just double that to 2GW by 2030, at huge expense to billpayers, but at times like these the ‘demand flexibility’ system will have to step in.
That would mean Labour will be heading into a 2029 election asking the equivalent of ten million homes to use energy not when they need it, but when the wind blows. I don’t believe that is anybody’s definition of energy security.
I was appointed Energy Secretary last year to reset the Conservative Party’s approach to Net Zero, making it more pragmatic and placing living standards first. I believe the country wants to play our part to protect the environment, but nobody benefits from Britain making itself unilaterally poorer. We would serve as a warning, not an example. If we took a less fanatical approach we could have a much greater impact. We could build an energy system that was reliable and cheap using the next generation of nuclear, and we could focus on inventing and exporting British clean technologies that would get Asia off coal. That would mean less carbon in the atmosphere and cheaper energy and more jobs in Britain.
The US election should serve notice to politicians who see their own lofty green ambitions as more important than the public’s living standards.
Incumbents in power during the global inflation crisis, including us, are finding this out at the ballot box. However, Labour’s jobs tax and their eye-watering plans for energy amount to an all-out assault on the working classes. As Ireland, Germany, and Canada head to the polls next and no ‘green’ electoral dividend arises, they will surely realise they must change course.
The question is, how much damage will Ed Miliband do in the meantime?
Claire Coutinho is Shadow Energy Secretary, former Secretary of State for Energy and Net Zero, and current MP for East Surrey.
Donald Trump’s re-election should be a warning to politicians who put their faith in inflationary green borrowing and who do not prioritise cheap power for their people.
It comes at an awkward time for the Labour Party as the National Energy System Operator (NESO) finally published their analysis of Ed Miliband’s ‘Clean Power 2030’ project – his plan to decarbonise the electricity grid in just five years’ time.
Ed spent the election promising voters he would cut their bills by £300 by 2030. However, just a few weeks ago he ordered Labour MPs to vote against my amendment to hold him accountable to his own pledge. The NESO report explains why. The report states that even with a ‘Herculean effort’, in the words of the NESO’s Chief Executive, the overall cost of a Clean Power system – costs which feed into bills – are “no higher” than if we carried on as we are.
This would be a far cry from the £300 off bills that voters were promised.
However, even to achieve this we would first need to build twice as many pylons and cables in the next five years as we have built in the last decade, with every single project built on time. If that hurdle is missed, consumers would pay billions of pounds for wind farms to switch off and sit motionless because the grid cannot transmit the electricity they would otherwise be generating. Second, we would need to contract as much offshore wind in the next one to two years as in the last six combined, double our capacity of onshore wind, and triple the number of solar farms. If this huge increase in demand pushes up prices, that would also end up on bills through green levies – which the IFS now predict will rise by £120 per household by 2029.
Let’s be optimistic and say we can build everything on time, despite going at a speed never before seen in this country, and while battling with global supply constraints. Even then, there’s an elephant in the room. The NESO have calculated how much they think a ‘Clean Power’ system would cost compared to a ‘status quo’ system where we don’t build as many renewables and continue using gas to generate reliable power.
To do so, they had to make assumptions about what gas prices and ‘carbon prices’ – a cost generators must pay to offset the pollution impact of burning fossil fuels – will look like in 2030.
Bizarrely, the report has assumed that in 2030, gas prices will be 40 per cent higher and carbon prices will be 70 per cent higher than assumptions produced by Ed’s own department. This is nothing less than statistical gerrymandering. The true contrast could be even starker as the global energy watchdog, the IEA, has predicted that gas prices will fall due to an oversupply and “fierce competition” between suppliers. This may be spurred on further by a President-elect determined to make the most of US gas exports.
Ed Miliband must immediately re-commission these systems costs using more reasonable assumptions so we can get a true sense of how expensive he’s about to make our energy. Perhaps this is all worth it anyway if it buys us energy security? Maybe consumers would pay up to get off ‘volatile fossil fuel pricing’, as Ed likes to say?
However, the NESO report shows us that Ed’s target would do no such thing. The NESO sets out two pathways to achieve Clean Power 2030. In the first, the cost of gas would still set the price of the system half of the time. In the other, gas sets the price 15% of the time, but it would also require a fivefold increase in the level of ‘demand flexibility’ in our system – where we prevent blackouts by asking or paying households to stop using energy to stop the system from being overloaded.
This is perhaps the most alarming part of the report.
In the last couple of weeks we have seen a period of very little wind and sun. The intermittent nature of renewable energy means that despite having 30GW of installed wind capacity in Britain, at times it has been producing less than 1GW of electricity. Ed might just double that to 2GW by 2030, at huge expense to billpayers, but at times like these the ‘demand flexibility’ system will have to step in.
That would mean Labour will be heading into a 2029 election asking the equivalent of ten million homes to use energy not when they need it, but when the wind blows. I don’t believe that is anybody’s definition of energy security.
I was appointed Energy Secretary last year to reset the Conservative Party’s approach to Net Zero, making it more pragmatic and placing living standards first. I believe the country wants to play our part to protect the environment, but nobody benefits from Britain making itself unilaterally poorer. We would serve as a warning, not an example. If we took a less fanatical approach we could have a much greater impact. We could build an energy system that was reliable and cheap using the next generation of nuclear, and we could focus on inventing and exporting British clean technologies that would get Asia off coal. That would mean less carbon in the atmosphere and cheaper energy and more jobs in Britain.
The US election should serve notice to politicians who see their own lofty green ambitions as more important than the public’s living standards.
Incumbents in power during the global inflation crisis, including us, are finding this out at the ballot box. However, Labour’s jobs tax and their eye-watering plans for energy amount to an all-out assault on the working classes. As Ireland, Germany, and Canada head to the polls next and no ‘green’ electoral dividend arises, they will surely realise they must change course.
The question is, how much damage will Ed Miliband do in the meantime?