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. This will cause prices to soar, hitting every household in the UK with a cost-of-living increase of over £900.

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.

Andrew Montford, the director of Net Zero Watch said:

It is vital that Sir Keir Starmer put a stop to Ed Miliband’s madness. This will be a disaster for the UK economy.

Notes for editors

Professor Hughes is arguably the UK’s pre-eminent energy economist. He was previously an academic at Edinburgh and Cambridge, and has worked as an advisor to the World Bank.

His estimates are published in an article at his Substack, and have been reproduced as a paper by Net Zero Watch.

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.

The key results are as follows:

Professor Hughes’ paper can be downloaded here.

Click to download