ANDREW NEIL: Labour’s Net Zero policy is fantasy piled upon stupidity. It will end in tears long before 2030 – but not before your bills go through the roof

Labour claims it will cut £300 from the average annual household energy bill by investing in supposedly cheaper renewable sources of energy. In the process it will ‘decarbonise’ the electricity grid so that by 2030 we won’t be using fossil fuels to generate electricity.

Thus the end of this decade is destined to be a milestone on the march to net zero emissions by 2050, when the use of fossil fuels to generate energy will be banished from our islands.

Even allowing for the tendency of politicians to be economical with the truth in election campaigns, this is quite a litany of bald-faced lies — a veritable wonderland of whoppers in which the truth is the opposite.

More renewable energy will not mean cheaper bills. The grid will not be decarbonised by 2030, no matter how much Labour spends trying to do it.

But the effect of this pointless, destined-to-fail obsession will be to increase your bills for heating and cooking, probably quite substantially.

Labour once promised to invest £28 billion a year between now and 2030 to decarbonise the grid. But that extravagance fell foul of Shadow Chancellor Rachel Reeves‘s desire to be seen to follow fiscally prudent spending rules (even though she was the one who, pandering to the crowd at a Labour conference, had unveiled the £28 billion figure with a flourish).

Labour now says it will invest £24 billion over five years, quite a falling off in scale and ambition.

Yet Labour still claims it can ‘green’ the grid by 2030. Which is curious, to say the least since, if it can do it with £24 billion over five years, why did it say it needed £28 billion a year for five years? The blunt truth is that both figures are fantasy. Don’t take my word for it. Just listen to Labour’s shadow chief secretary Darren Jones, the man who will be in charge of the money at the Treasury in a Keir Starmer government.

Asked if even £28 billion a year would be enough he replied, without hesitation (and with unusual honesty since he didn’t know he was being recorded): ‘No it’s tiny… [we need] hundreds of billions of pounds.’ So where would such sums come from? Why the private sector, Jones opined, not taxpayers. Our existing energy companies would stump up the required investment.

‘It just needs the energy regulator to do what’s required to unlock the investment,’ he said blithely. Well, he’s in for a rude awakening when he settles behind his Treasury desk.

For a start, Labour is so hostile to so many of our existing energy giants — making windfall taxes on them essentially permanent and banning any new oil or gas licences in the North Sea — that it’s inconceivable that they would meekly stump up hundreds of billions in furtherance of Labour’s decarbonising fantasies.

Even if they were so inclined, they would not do so without multi-billion pound subsidies and minimum price guarantees for the energy they would generate, the bill for which would be sent to households, either through even more levies slapped on their energy bills, or higher taxes — or, more likely given the vast sums involved, both.

That’s the way it already works. It is a Great Green Lie that renewables mean cheaper energy bills. This has been claimed for years yet consumers have yet to see it happen.

If it was true, why would energy companies continue to demand various costly price guarantees before investing in, for example, offshore wind?

Last year the Government tried to expand offshore wind capacity by offering investors a generous ‘strike price’ of £44 per megawatt hour. There was not a single taker even though it meant investors were offered a guaranteed price — set at 2014 prices so in reality they’d be able to charge a minimum of a third more than £44 — and indexed-linked to inflation regardless of the market price of electricity.

The Government has come back this year with an improved offer of £74 per megawatt hour, again at 2014 prices. There’s still no rush of fresh investment. At that price your electricity bills will not be coming down. But even that doesn’t reflect that real cost of offshore wind. 

You need to add in the massive extra grid costs to carry the power to customers (offshore wind farms are often in remote locations); the need for back-up capacity (almost certainly gas-generated electricity for times when the wind is not blowing); and the huge cost of battery storage to call on when wind generation is not strong enough to meet demand.

Add all that together and, even with more renewables, your electricity bills will be going up, not down.

Yet this is the path Labour has chosen. It says it will double onshore wind capacity, treble solar power and quadruple offshore wind — all before the decade is out.

It is, of course, a foolish fantasy, involving the construction of far more renewable capacity in the next five years than we’ve installed in the past 15. But billions will be squandered on this fool’s errand because so-called crash programmes that involve accelerated building schedules always add to the cost, as business will demand even higher strike prices to proceed. And who will foot the bill? Why, the consumer and taxpayer, of course.

Industry experts put the cost of such an expansion of renewables at over £200 billion if you proceed at a measured pace — and more like £300 billion if you rush it, as Labour plans.

But the extra cost doesn’t end there. The National Grid will need to spend tens of billions on the electricity grid for the necessary upgrades to accommodate the demands of decarbonisation and tens of billions more on new distribution systems.

What about Great British Energy, I hear you say? Throughout the election campaign, Labour has touted the new state-owned entity it plans to establish as the solution to our energy problems — though one Labour adviser I interviewed couldn’t even tell me what it would do.

What I can tell you is that it will have around £8 billion in capital to deploy over five years — an embarrassing pittance in a sector in which companies spend many billions on single projects.

Labour’s energy policy is fantasy piled on stupidity and it will end in tears long before 2030.

But not before you’ve had to stump up a lot more for your energy bills.

Yet as Labour plans to go down this expensive energy cul-de-sac, it is intent on destroying those parts of our energy system that serve us well. For reasons that escape all sensible folk, which naturally excludes the SNP and eco-zealots, Labour will issue no new oil and gas licences for the North Sea. This is a death sentence for a territory that is still capable of exploitation.

Business confidence in Britain’s oil and gas sector is now lower than it was when oil prices were $16 a barrel (they are currently around $80). Aberdeen is Britain’s oil capital and its Chamber of Commerce says an incoming Labour government will have 100 days to restore confidence or £30 billion of investment will leave our shores for friendlier climes.

This would be a death blow to an industry that generates exports worth £60 billion a year, employs tens of thousands directly and indirectly and contributes over £5 billion a year in taxes. Our trade deficit, already bad enough, will worsen.

Yet Labour plans to watch this well-established, profitable national asset go down the Swanee while expensively pursuing its own Net Zero fantasies, which involve ridiculous claims about all the well-paid ‘green’ jobs it will create.

Aberdeen’s Robert Gordon University says there could be 80,000 new jobs associated with renewables by the end of the decade. But a halt to North Sea development would see 60,000 jobs go, quickly.

A net rise of 20,000 jobs (if that) is hardly the green jobs cornucopia Labour is promising. No wonder two of the country’s biggest unions, Unite and the GMB, have refused to sign up to Labour’s energy plans, saying they’re bad for jobs, investment and even national security (because we’ll end up simply importing more oil and gas from unpredictable dictatorships).

Labour is not being held to account for any of this in the election campaign.

The man mainly responsible for the party’s energy policies, Ed Miliband, has been largely missing in action. He’s made the odd appearance but not once has he been properly grilled on what he has in store for us.

Labour has put green investment at the core of its pitch to kick-start economic growth. There are good grounds for fearing its energy plans are more likely to knock the stuffing out of the economy.

Miliband needs to stop his fruitless watering of the magic money forest at the end of his garden and explain himself to voters.