Posted by Sam Fenny - Memes and headline comments by David Icke Posted on 4 June 2024

Labour’s Great British Energy Suicide Note

This Substack has been highly critical of the Conservative Government’s energy policy. However, we are now in an election period, so it is time to subject Labour’s energy plans to some scrutiny. On Friday, Labour announced more details about its plans for Great British Energy.

Their plans include many promises, but precious little detail on how they will be achieved. Labour’s central claim is that they will “cut energy bills for good” and they put some flesh on the bones by claiming in the text of their regional maps their plans will “save £300 off the average annual household energy bill”. Labour’s claim appears to be based upon a report by the energy thinktank Ember. However, it does appear they mean a saving on electricity bills, not overall energy bills.

Magical thinking for renewable energy prices
Ember use Ofgem’s energy price cap for 3Q23, which states that the average household electricity bill was then £1,127. They claim that if we follow their “Delivering Commitments” scenario, electricity bills will fall to £828 by 2030, for a saving of £299 per year, which they conveniently round up to £300. The trouble is, the latest Ofgem price cap shows the average electricity bill will be £913 in 3Q24, or some £214 less than Ember’s starting point. More than two-thirds of the proposed saving has already been delivered, mostly by falling gas prices. In fact, the total energy bill (including gas for heating) in the price cap has already fallen by £449 since 3Q23, so on that measure 1.5 times the promised saving has already been made.

These reductions in the electricity price cap have been delivered despite a massive increase in the cost of renewables. Since 3Q23, the assumed cost of Renewables Obligations in the Ofgem Price Cap is up nearly 15% to almost £32/MWh supplied and Feed-in-Tariff costs have gone up over 18% to £7.64/MWh supplied. The annual cost of Contracts for Difference has gone up too, from around £770 million assumed in 3Q23 to £3,087 million in the latest price cap report. The CfD cost per MWh has gone up roughly four-fold from £3/MWh supplied to over £12/MWh supplied. Taken together, all these subsidy schemes add about 5.1p/kWh to our electricity bills, up from 3.7p/kWh in 3Q23. It is difficult to understand how adding more renewables will reduce electricity prices.

To square the circle, Ember relies on a single dodgy assumption. They assume that all new offshore wind power will be delivered at the price achieved in Allocation Round 4 (AR4). This is the round where several wind farms agreed to deliver electricity at £37.35/MWh in 2012 prices or about £52/MWh in today’s money. This is problematic because Vattenfall pulled out its Norfolk Boreas development last year because it could no longer deliver at the agreed price. Moreover, the other AR4 projects are being offered the chance of rebidding part of their projects at higher prices in AR6. The offer price for offshore wind in AR6 is £73/MWh in 2012 money or £102/MWh in today’s money, nearly double the winning bids in AR4. So, to support their claim of a £300 per year saving on electricity bills Ember relied upon magical thinking. They assumed offshore wind prices will be about half of what is being offered this year.

Labour also rely upon another report from Ember that contained completely unrealistic build out plans for renewables which I covered here. We are nowhere near on track to deliver the required renewables capacity.

Fantasy green jobs
Labour also claims they will create 650,000 new skilled jobs in the “industries of the future”. They are not quite clear what this means but let us assume they mean in the wind and solar power industries.

In 2021, the wind and solar sectors employed a total of 22,000 full-time equivalent people, at a cost of around £250k per job. Labour is proposing they will deliver a stunning 30-fold increase in employment by 2030. Even if they did manage it, we could not afford it. If it really takes so many people to deliver so much renewable power, then this should not be paraded as a badge of honour. Quite the contrary, it will be a sign that the productivity of the power sector has plummeted.

Spending on expensive energy sources
Labour promises to accelerate spending on floating offshore wind, tidal power and green hydrogen by co-investing with private partners.

In AR6, floating offshore wind is being offered £176/MWh in 2012 prices or £246/MWh in today’s money, which is three to four times recent wholesale electricity prices. Moreover, the Hywind floating offshore wind farm is being towed to Norway for major maintenance after just seven years of operation. This is hardly a sign that floating offshore wind is going to be our energy saviour.

Tidal Stream power is being offered £261/MWh in 2012 prices, or a staggering £364/MWh in 2024 prices. In December, the Government announced the results of its first green hydrogen auction. The average price offered was £175/MWh in 2012 prices, which equates to £244/MWh in 2024 prices. Electricity made from this green hydrogen would cost over £500/MWh.

All of these technologies are far more expensive than existing renewables and many times the cost of gas-fired electricity. This “co-investing” will only increase electricity bills, the exact opposite of their claim to reduce bills by £300 per year.

Read More: Labour’s Great British Energy Suicide Note

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