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Ed Miliband’s Net Zero drive won’t bring down energy bills

How to solve a problem like the energy price cap? Credit: Getty

August 23, 2024 - 5:00pm

To a German, the UK’s new Labour government feels eerily familiar. Listening to the musings of Secretary of State for Energy Security and Net Zero Ed Miliband is strongly reminiscent of how Germany’s Greens have been speaking about the Energiewende (energy transition) for the last 14 years. Although Miliband — in post for less than two months — can hardly be blamed for British industrial electricity costs remaining the highest in Europe and this autumn’s energy price cap hike, he can be blamed for his misguided faith in renewables to bring down those costs.

The German story is illustrative, and Labour should heed its lessons. There, investment in renewables has so far failed to bring down prices and is a major cause of the country’s deindustrialisation. The German government banned fracking in 2017, deepening its dependency on Russian energy and plunging many citizens into energy insecurity.

Yet even this seems to be less of a warning and more of an instruction manual for Miliband, who upon entering office almost immediately banned all new drilling in the North Sea, overruling previous decisions by his own officials. Keir Starmer’s government believes that fossil fuels will no longer be needed, because the “rooftop revolution” will satisfy Britain’s energy needs.

This policy is in fact even more suicidal than what the Germans have tried to do. The solar power potential in the UK is less than it is in Germany, given the former’s smaller land mass and cloudier weather. On average, the capacity factor of solar farms in the UK is around 10%, meaning the actual electricity production is about one-tenth of the full capacity (what could be generated under ideal conditions, i.e. no nights and no clouds — ever). By comparison, a well-maintained nuclear power plant can operate at over 90% of its full capacity, almost entirely independent of weather conditions.

The expected gaps from solar will supposedly be filled by wind turbines, using strong winds in the North of England. The  problem, however, is that much of the country’s industry is located in the South, so Miliband’s electricity abundance will be where nobody needs it, unless the Government builds expensive and extensive long-distance transmission lines, which in turn pushes up costs. It is ludicrous to think that industry and people would move north, closer to cheaper energy. Instead, they will simply leave the country altogether. As Make UK, one of the most important domestic industry lobby groups, said of Miliband’s Net Zero plan: “Steel or other energy-intensive industries would have no realistic option to relocate their very heavy assets to more favourable pricing zones and would instead be forced to shut down. Moreover, encouraging a factory to move makes it open to moving out of the UK entirely, as it will reconsider all its options for the best location.”

Just like in Germany, if you force your steel or aluminium industries to move, they will not go to the place with the cheapest wind or solar energy, but instead to wherever energy is cheapest in total. That realistically means somewhere close to the natural gas fields in the US, coal power in China or — a competitor few seem to have on the radar — Saudi Arabia. The Gulf state not only has fossil fuels in abundance, but is also better positioned for solar power.

The belief in cloudy London and fairly cloudy Berlin that you can outperform the Middle East in solar power-generation is so absurd that it has an almost religious credulity to it. Often, Miliband tends to sound more like a preacher than a politician, once claiming: “It should be socially unacceptable to be against wind turbines in your area — like not wearing your seatbelt or driving past a zebra crossing.” Even if it were possible, plastering every acre of field and hedgerow from the English Channel to John o’ Groats would not suffice to keep British industry competitive or energy-independent.

Most religions demand sacrifice of some kind. Under this new government, the British people will soon find out that the religion of Net Zero is no exception.

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