A bombshell report reveals today that despite years of promises by Labour, Coalition and Tory governments, the radical shift to ‘green’ renewable energy will have cost the economy £319 billion by 2030 – three times the annual NHS budget for England.
Instead of cutting energy bills, the policy will be adding an average burden of £584 a year to every household by 2020, and £875 by 2030. Yet this is only the start. By 2050, green energy policy will be costing every household £1,390 a year, based on 2014 prices.
The report’s calculations are derived entirely from official figures issued by Government departments and the Office for Budget Responsibility. They reveal for the first time the true cost of levies on bills to fund the shift to renewable energy.
The impact results from the 2008 Climate Change Act, and will be felt mainly by the poorest and so-called JAMs – those families who are ‘just about managing’.
Over the period 2014-2030, the report says, the accumulated burden borne by every household will be £10,800. The countrywide cost to the economy in 2014-2020 will be £95 billion, rising to £319 billion in 2014-2030, and an eye-watering £1.035 trillion from 2014-50, by which time the economy, thanks to the Act, is supposed to have become almost decarbonised.
The report, The Cost Of The Climate Change Act, is by Peter Lilley, the Conservative MP and former Trade Secretary. He was one of only three MPs who voted against the Act, piloted through Parliament by then Labour Energy Secretary Ed Miliband. The report will be published by the Global Warming Policy Foundation, the think-tank founded by Lord Lawson. Sometimes attacked for its sceptical view of climate science and energy policy, its advisory council includes some of the world’s leading experts.
Senior figures from all main parties have claimed repeatedly that green energy would be good for the economy and save money. In 2005, Chancellor Gordon Brown said most businesses could ‘easily achieve 20 per cent reductions in bills’.
In 2014, the Lib Dem Energy Secretary Ed Davey claimed ‘the impact of all the Government’s energy and climate change policies mean that household bills are currently around £90, on average six or seven per cent, lower… than otherwise’. But this, the report says, was ‘an astonishing claim to make of a policy that involves massive subsidies of costly energy sources’.
In fact, as Mr Davey spoke, the Government’s own Climate Change Committee, which sets the country’s ‘carbon budget’ targets under the Act, had quietly issued figures showing that, even then, the average household was paying out £248.
Philip Hammond echoed the claim while he was Foreign Secretary last year by insisting: ‘Renewables… will reduce the cost of energy and the risks of climate change.’
The Act is the world’s most aggressive law, imposing rigid emissions cuts: 35 per cent from the level in 1990 by 2020, and 80 per cent by 2050 – a cut so deep it will require total economic restructuring.
Yet it has so far done nothing to reduce the threat of climate change. The report says the UK’s unilateral measures are increasing its carbon footprint, because industries and jobs are being ‘outsourced’ to high-emitting countries such as China and India, and our imports from such countries are rising.
Under the much-vaunted UN Paris Agreement, India is allowed to triple its already-massive coal production by 2030, and has not said when its emissions will peak. China says it will only begin to reduce its emissions after that date.
Mr Lilley’s report says previous calculations of the cost of green energy have been massive underestimates. First, they take no account of the green levies and taxes paid by businesses, two-thirds of the total, assuming they have no impact on consumers. In fact, official figures show, the cost is passed on.
Second, they fail to take account of the huge ‘system costs’ of connecting and managing renewable energy sources by the National Grid, and of paying for back-up fossil fuel plants needed when – as during the recent still, cold spell – neither wind nor solar panels produce more than a tiny fraction of nominal capacity.
Also being hidden is the colossal cost of restructuring the entire economy: if emissions are cut by 80 per cent by 2050, not only will electricity have to come almost entirely from non-fossil fuel, but total output will have to roughly triple, to power millions of electric vehicles and heat most homes.