IT is no accident that the Conservatives chose to start their election campaign by promising to make it easier for us all to change to cheaper energy deals.
Energy prices are going to be one of the big divides between Labour and the Tories.
While the Government has hardly excelled itself on energy policy, Sir Keir Starmer is threatening to enact a policy which would fleece every household in the country.
Of course, all energy consumers have been hammered over the past couple of years.
Gas and electricity prices were already rising before Vladimir Putin invaded Ukraine, sending bills soaring as European countries desperately sought new sources of oil and gas to replace those from Russia.
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Yesterday’s news that Ofgem’s energy price cap will be reduced in July to a level where the average household will pay £1,568 on a dual gas and electricity bill — down from £1,690 at present — is further evidence that the market is finally settling down, much to everyone’s relief.
But for how long?
If Labour is elected we may soon be looking back at the winter of 2022 and reminiscing about how affordable life seemed then.
Starmer’s energy policy is, put simply, one of the most ruinous — and dishonest — policies to be put before an electorate in modern times.
Labour is promising that by 2030 — just after the lifetime of the next Parliament — it will be powering the electricity grid with 100-per-cent zero-carbon energy.
And in the process, it claims, it will cut our annual bills “by up to £1,400”.
Given that the average household by July will be paying just over £1,500 a year, it seems to be promising us virtually free energy.
That isn’t just slightly too good to be true, it is a claim which would make a self-respecting snake-oil salesman blush with embarrassment.
If you read Labour’s supposedly detailed policy document on this, called Making Britain A Clean Energy Superpower, all it proposes to do is to set up a government-owned company called Great British Energy to build yet more wind and solar farms as well as finish two nuclear power stations — one of which is already being built, the other in planning.
Even Ed Miliband has stopped going on about claiming that wind power is “nine times cheaper” than gas power.
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It was a false claim even at the height of the 2022 energy crisis, but looks ridiculous now.
Last September, when the Government held its last auction for offshore wind, it didn’t receive a single bid.
Thanks to rising metals prices and higher interest rates, the cost of building wind turbines had risen so much that they could no longer make a profit, even at the guaranteed, inflation-indexed energy prices the Government was offering them.
Even Ed Miliband has stopped going on about claiming that wind power is 'nine times cheaper' than gas power
Regardless of costs, the GMB union, which represents engineering workers, has warned Labour that its plans are simply impossible on the timescale it is promising, because the capacity for constructing the required wind and solar farms just doesn’t exist.
Yet for once, Labour is refusing to listen to the unions.
There is another very big problem with Labour’s plans.
Wind and solar energy are, of course, intermittent.
On a sunny, windy day it may well be possible to power Britain’s homes by renewable energy alone, but what is Labour planning to do, say, on a calm, cold winter evening when we need to keep warm and yet there is very little wind and solar energy on offer?
Astonishingly, neither Starmer nor Shadow Climate and Energy Secretary Ed Miliband have a credible answer to this.
Snake-oil salesman
At the moment we cope in these situations because we have plenty of gas power stations to take up the slack.
But after 2030, when Labour has closed them all?
The party’s energy plans make a passing reference to “long-term energy storage”, without mentioning the costs.
Fortunately, a US government laboratory can give us some idea of how much we would all be paying.
Over the lifetime of a lithium battery installation, it says, the cost of storing energy within it works out at $200 (£160) per megawatt-hour.
That is around three times as much as it costs to generate the electricity in the first place — and that is the cheapest form of storage.
Perverse claim
Using large amounts of stored energy would add a huge extra dollop to household bills — and yet Labour is perversely claiming it will save us money.
Anyone who really thinks Labour will cut our energy bills should look at Robin Hood Energy, a company set up by Labour-controlled Nottingham Council in 2015 to supply energy to the city’s homes.
Like Great British Energy, it promised 100-per-cent renewable power, lower bills and subsidised insulation schemes.
What happened?
It was quickly consumed by debt and in 2020 went bust, costing the city’s taxpayers £38million to sort out the mess.
That is Labour’s real-world experience with trying to run an energy company.
Don’t say you weren’t warned.
- Ross Clark is the author of Not Zero: How An Irrational Target Will Impoverish You, Help China (And Won’t Even Save The Planet), published by Forum, £10.
