Net Zero will cost an eye-watering ~£800 billion (over $1 trillion) by 2050, as experts reveal the UK’s economic lights are flashing red.
The push to hit Net Zero will cost a staggering £803 billion [$1.03 trillion US] by 2050, as experts revealed the lights are flashing red on the UK economy. [emphasis, links added]
The cost of the transition to meet green targets over the next two decades will hit taxpayers for an average of £30 billion [$38B US] a year, Ministers have been warned.
The independent Office for Budget Responsibility (OBR) says that two-thirds of this sum will be due to lost tax receipts, mainly from the loss of fuel duty income.
They said that climate change “poses significant risks to economic and fiscal outcomes in the UK”.
The body says the impact will be split between investment costs of around £9.9 billion [$12.7B US] a year and the extent of revenue losses from declining fuel taxes as petrol-driven cars are replaced by electric vehicles.
But the watchdog says there is considerable uncertainty over the costs, which could be lower if there is a replacement for the loss of fuel duty.
The GDP could fall by 3.3% by 2060 in the event of 2°C [~36°F] warming and 7.8% by 2060 in the 3°C [~37°F] scenario, the report said.
They add that the figure could be even higher if governments fund more of the transition path and “rely less” on regulation or taxation to fund it.
Shadow Energy Secretary Claire Coutinho hit out at Cabinet Minister Ed Miliband, who vowed to bring energy prices down. It comes after Tory leader Kemi Badenoch said hitting Net Zero targets by 2050 was impossible.
Ms Coutinho said:
“Ed Miliband is not being honest about the true cost of his mad Net Zero targets. He promised to cut everyone’s bills by £300 [$384 US], but this is yet more evidence that his plans mean higher bills, jobs lost, and more imports from China.
“Kemi and I have been clear – Net Zero by 2050 is impossible without bankrupting the country. Cheap energy and people’s living standards have to come first.”
The move comes as Chancellor Rachel Reeves is already grappling with the public finances in the short term ahead of the Budget in the autumn.
The warning on climate change costs comes as the OBR says the UK’s public finances are in a “relatively vulnerable position”.
They say there has been limited success in recent years to put them on a sustainable footing.
The reversal of planned tax increases and spending, such as recent welfare reforms and winter fuel cuts, has added to government debt.
The OBR said its annual fiscal risks and sustainability report that debt is projected to be “above 270% of GDP by the early 2070s”.
The forecaster added that recent rises in debts have led to “a substantial erosion of the UK’s capacity to respond to future shocks and growing pressures on the public finances.”
The watchdog also says that the triple lock, which helps boost pensioners’ state pension, has cost three times what it was initially assumed to cost when it was brought in back in 2012.
Read rest at The Sun
See Related Article Below
£80 Billion Needed For Net Zero Grid Upgrades In Next Five Years
PAUL HOMEWOOD
OFGEM have just announced the first tranche of investment in Britain’s grid upgrades needed to hit 2030 renewable targets.
Ofgem has today (1 July) given the provisional green light to an initial £24bn investment programme to enhance energy security while enabling the transmission of more clean energy from renewable sources.
Over £15bn will ensure the continued safe operation of Great Britain’s gas transmission and distribution networks, making sure they deliver safe and secure supplies of gas to households and businesses across the UK.
An initial £8.9bn investment is being committed to Britain’s high-voltage electricity network, with a further £1.3bn ready to go – to power the biggest expansion of the electricity grid since the 1960s. The draft settlement is the first step in an estimated £80bn investment programme boosting electricity network capacity, protecting UK households from the volatile international gas markets that caused the massive fluctuations in energy bills in recent years.
The investment in our grid, which will rise to around four times the current spending levels, will allow for 80 transmission projects and all associated works right across the country to be completed within five years. This will significantly increase the grid’s capacity, through new power lines, substations and other technologies, to handle the flow of electricity from new renewable sources.
These projects, which are also vital for driving growth, will upgrade over 4400km of overhead lines and deliver 3500km of new circuits, including investments offshore, doubling the total build in the last 10 years. It means up to 126 GW of clean power generation will be connected to the grid by 2030 alongside additional flexible storage and technologies, enough to power millions of households with clean, stable and secure energy.
Ofgem CEO Jonathan Brearley said:
“Britain’s reliance on imported gas has left us at the mercy of volatile international gas prices which during the energy crisis would have caused bills to rise as high as £4000 for an average household without government support. Even today the price cap can move up or down by hundreds of pounds with little we can do about it.
“This record investment will deliver a homegrown energy system that is better for Britain and better for customers. It will ensure the system has greater resilience against shocks from volatile gas prices we don’t control.
“These 80 projects are a long-term insurance policy against threats to Britain’s energy security and the instability of prices. By bringing online dozens of homegrown, renewable generation sites and modernising our energy system to the one we will need in the future we can boost growth and give ourselves more control over prices too.
“Doing nothing is not an option and will cost consumers more – this is critical national infrastructure. The sooner we build the network we need, and invest to strengthen our resilience, the lower the cost for bill payers will be in the future.
This critical investment covering upgrade and expansion of the electricity grid, maintenance and also gas depreciation in its entirety is estimated to increase network charges on bills by £104 by 2031. This includes £30 for the gas networks and £74 for the electricity grid.
Around half of this investment, including £30 on gas networks, is needed for the gas and electricity grids to maintain safety, resilience, and reliability.
The remainder, around £52, will be used to expand the capacity of the electricity grid to deal with the rising demands of a more electrified energy system, as we move away from gas.
This investment (£52) alone is expected to lead to around £80 of savings for consumers by 2031 compared to not investing by reducing constraint costs (money paid to wind farms to switch off because the grid is unable to transmit their power output) and making better use of our clean renewable energy so we are not having to pay for expensive gas plants to serve demand. So bills are expected to be around £30 lower than they would have been had this investment in upgrading and expanding the electricity network not been made.
Taken all together the net cost of these investments on bills amounts to around £24 a year, or less than 40p per week, by March 2031, although this does not take into account the overall benefits of reaching clean power that can reduce bills.
The £30 increase in gas network charges on bills by 2031 would be necessary in all scenarios in order to maintain safety, resilience, and reliability in our gas networks.
OFGEM say household electricity bills will rise by £74 a year, as a result of this £80 billion upgrade. That equated to £6.6 billion a year, given that non residential consumers use about 60% of total electricity. OFGEM say they are assuming return on capital of 6%, which implies depreciation costs of 2.5% over 40 years.
£6.6 billion works out at about £22/MWh, four times NESO’s projection of just £5/MWh, which also includes constraint costs.
But extraordinarily, the NESO Clean Power 2030 Report did not take grid upgrade costs into account. The report states:
Neither is there any costings for the upgrading of local distribution networks.
The figure it offer for “Grid expansion and constraint costs” only reflects the increase in constraint costs from £2.8 bn to £3.7 bn a year.
To the £80 billion mentioned, we can another £16 billion already spent or committed to by the National Grid between 2021 and 2026.
But the spending won’t stop in 2030. OFGEM note these current plans will cater for 126 GW of “clean” power, in line with NESO’s plans. But buildout of renewables will still need pursued rapidly.
The BBC reported a year ago that another £58bn is for work needed between 2030 and 2035.
Add the lot up and you are looking at £154 billion, which will add £13 billion to our bills each year. None of this expenditure would be needed without the expansion of renewable energy and the increased demand for electricity necessitated by Net Zero.
In true Orwellian double speak, OFGEM’s Jonathan Brearley tells us that spending £100 billion of your money will make you better off!
SOURCE: Not a Lot of People Know That
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