Officials quietly acknowledged the price gap as electricity bills keep soaring under low-carbon schemes.
MAURICIO ALENCAR
The UK government has quietly admitted that using low-carbon technologies essential to the rapid drive to net zero are more expensive than when fossil fuels are used as an energy source, City AM can reveal. [emphasis, links added]
Labour ministers are expected to double down on expanding the use of green technologies to lower costs as the Treasury and Department for Business and Trade are set to unveil the UK’s industrial strategy next week.
The blueprint for growing the economy will outline plans to lower energy costs.
The Department for Energy Security and Net Zero (DESNZ) saw its budget increase by 16 percent at the Spending Review, with more funding set to go toward nuclear power and clean energy in a bid to remove nearly all fossil fuels from UK electricity production by 2030.
However, officials working under Energy Secretary Ed Miliband told the Committee of Public Accounts, which scrutinizes expenditure by different government bodies, that higher electricity prices made “low carbon technologies” more expensive, despite the government linking the development of green technology to more affordable energy bills.
The admission came in the minutes for a PAC report, which is publicly available online, detailing the government’s responses to recommendations made on energy policy.
The statement explains that high residential electricity prices in the UK do not reflect the “cheaper wholesale price of clean energy” and can stem from the costs of some net-zero policies.
“Low carbon technologies can be more expensive to run than fossil-fuel powered alternatives,” the government’s response read.
Manufacturers paid just under twice as much for electricity as they did for either gas or other fuels last year…
“The price disparity between electricity and gas needs to be addressed to make it more attractive for consumers to install clean technologies like heat pumps.”
It follows a similar admission earlier this year that net-zero policies would push up energy bills in the “short to medium term,” according to a page on the government’s website, as first reported in the Telegraph.
Data published in March showed standard electricity bills reaching £1,067 last year compared to £814 for gas, meaning average energy bills were £1,881 in 2024.
Manufacturers paid just under twice as much for electricity as they did for either gas or other fuels last year, with UK industrial electricity bills nearly 50 percent higher than those seen in France and Germany and roughly four times higher than in the US.
Net-zero costs overlooked
Oxford University’s Professor Dieter Helm has said that estimates on the impacts of renewable energy have historically overlooked the cost of preventing issues surrounding unreliable weather, for example.
Keith Bell, holder of the Scottish Power Chair in Future Power Systems at the University of Strathclyde, has said that a power system “dominated by renewables” could still help to reduce costs overall as demand can be “reliably” met through clean energy.
City AM understands the government has not yet decided on how it plans to rebalance gas and electricity prices.
Read rest at City AM
Via Climate Dispatch
Featured image: Alamy
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