Is Labour’s 2030 green energy target realistic and what impact will it have on bills?

Keir Starmer’s proposals for public company Great British Energy to invest in clean and renewable energy are at the center of Labor’s plans to completely eliminate fossil fuels from electricity production in the UK by 2030, five years earlier than current government plans.

There are, however, two criticisms of this goal.

The first opinion comes from conservatives who argue that such a rapid decarbonization schedule will increase household energy bills.

The second opinion comes from some energy analysts who simply do not believe that decarbonizing electricity after 2030 is practically possible.

So is such criticism correct?

There is no doubt that the target for Labor is very ambitious.

According to estimates by Aurora Energy (which was commissioned by the right-wing think tank Policy Exchange), the total installed capacity of offshore wind farms in the UK should more than triple over the next six years.

Solar energy production and onshore wind power would need to roughly double.

This would replace electricity currently provided by gas-fired power plants.

Would this increase your bills?

Most energy experts agree that decarbonization will be beneficial to household energy bills in the long run because the UK would be less reliant on imported and internationally traded natural gas and oil for power generation – fossil fuels whose prices can be extremely variable.

The huge increase in British household bills in recent years mainly reflects the rise in European wholesale gas prices that followed Russia’s invasion of Ukraine and choking off gas supplies across the continent.

However, the initial investment in new solar panels and wind turbines required by the UK to decarbonise in the short and medium term will come at a price, which may be reflected in household bills.

This is a cost that would, of course, materialize under the Conservatives’ policy of decarbonizing electricity generation also by 2035.

But all things being equal, faster decarbonization would mean these costs would be passed on more quickly.

However, all else may not be equal.

If another global fossil fuel price shock along the lines of 2022 were to occur at some point in the next decade, it could be that British households would be financially better off thanks to a faster transition to renewable energy.

So when it comes to how much faster decarbonization of electricity might cost – or save – households, putting it in monetary terms is unreliable. Labor says their plan will save households £300 by 2030.

The reality, however, is that this will depend largely on what happens to fossil fuel prices in the coming years.

Is this achievable?

As for the second criticism, that electricity decarbonization cannot be achieved by 2030, the reality is that experts are divided.

Some, like Dieter Helm, professor of economic policy at the University of Oxford, who was commissioned to produce a review of energy costs for the UK government in 2017, say Labour’s target is “unattainable”.

But Chris Stark, former director of the government’s Independent Committee on Climate Change, says that while it would take a “Herculean effort”, it can almost be done.

One of the biggest (and underestimated) obstacles to meeting the 2030 target is not the cost of installing new solar panels and wind turbines, but the practical difficulty – due to planning regulations and local opposition – of modernizing the UK’s electricity grid.

The network is made up of the pylons, cables and substations needed to transport electricity across the UK from the power stations, wind and solar farms where it is generated, to the homes and businesses that use it.

It is estimated that under the Labor Party’s plans, the total electricity generation capacity in the UK would have to almost double by 2030.

This additional power would be needed to provide electricity for, among other things, the new electric heat pumps for home heating (replacing gas-fired boilers) as well as the electric cars (replacing petrol and diesel vehicles) that people are expected to drive in the coming years .

Meeting this increase in electricity demand will require huge efforts to build network infrastructure.

As the head of the International Energy Agency, Fatih Birol, put it last year: “We must invest in networks today or we will face gridlock tomorrow.”

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