From Climate Scepticism

By MARK HODGSON

Jit’s article, The Green Green Green Benches of Home portrays a depressing picture of MPs (with a single exception) taking part in what laughingly passes for a debate on the UK’s energy infrastructure. MP after MP (well, perhaps a couple of dozen of them in what looks like a depressingly empty Commons Chamber) queued up to repeat the net zero mantra, stress how we need to act in respect of the “climate crisis” and generally spend oodles of money on untried and unreliable technology to mess up our energy generation, and what’s more, to do so in short order. It’s all increasingly urgent, or so they seem to believe.

One wonders if any of them have bothered to read the House of Commons Public Accounts Committee report on Decarbonising the Power Sector published just a couple of weeks earlier. Signed off by 16 members, it doesn’t exactly present a flattering or optimistic view of the net zero plans that most MPs seem to believe in. Of course, no self-respecting member of the House of Commons would suggest that net zero is a silly or pointless policy, and the Committee members nowhere question the wisdom of pressing on with net zero. However, they do very much question its practicability, the chances of achieving it within the timescales set by Parliament and the feasibility and utility of the Government’s strategy (if such it can be called). Take the opening paragraph of the Summary, with which the report commences, as an example:

Decarbonising the power sector by 2035 is a massively ambitious undertaking, and vital to achieving net zero overall by 2050. In practice, this means that government expects all electricity will come from low-carbon sources by 2035, subject to maintaining security of supply (that is, no blackouts). Demand for electricity is also forecast to more than double over the next two decades as more sectors switch from fossil fuels to electricity. With only 12 years left to hit its ambition, the Department for Energy Security and Net Zero has a lot to do if it is to achieve its ambition, and do so at least cost to bill payers and taxpayers, all while ensuring security of supply so that the lights stay on.

Those words alone might, one would have thought, have given pause for thought to all those MPs participating in the energy infrastructure debate. Apparently not, however. Well, since that didn’t ring any bells with our elected representatives, how about this from the Introduction? It tells us that the Government’s recently published Net Zero strategy:

…included an expectation, responsibility for which falls to the recently created Department for Energy Security & Net Zero, that all electricity will come from low-carbon sources by 2035, subject to security of supply. It is also subject to there being sufficient zero and low-carbon electricity generation, over the same period, to supply an expected 40% to 60% increase in electricity demand as modes of transport and heating switch to electricity from fossil fuels. Government has set ambitious targets for domestic energy generation for offshore wind, solar and nuclear power, and estimates that £280 to £400 billion of public and private investment in new generating capacity will be needed by 2037 (the end of the Sixth Carbon Budget).

Not so easy, and not so cheap, it appears. The Public Accounts Committee knows this. It tells the public, and the other 600+ MPs that this is problematic. Why aren’t they listening?

Never mind – the Government’s plans to de-carbonise, via its nuclear, solar and wind power ambitions, are credible, aren’t they? What’s that you say? They’re probably not?

We are sceptical that plans for expanding nuclear, solar and wind power are credible. Government has set itself highly challenging electricity generating capacity ambitions for nuclear (24GW by 2050), solar (70GW by 2035) and offshore wind power (50GW by 2030). By comparison, the UK’s current operating capacity is less than a quarter of each of these ambitions. For example, its nuclear ambitions include a mix of large stations as well as so-called SMRs, a type of smaller reactor untested in the UK and not operating at scale anywhere in the world. The Department considers it worth pursuing this (and other nascent technologies) to ensure the UK has a range of options from which to select its ultimate power generating mix, and is not overreliant on any single technology. The Department is creating Great British Nuclear to build capacity, expertise and a regulatory regime to expand its nuclear pipeline; however, in the last two decades, government has only agreed one project which has entered construction, at Hinkley Point C. The Department also says it is tracking offshore wind projects at various stages of development that could produce 80GW of electricity when operating. Should these projects generate this much electricity, the Department would exceed its ambition for offshore wind power; however, it acknowledges that not all these projects will succeed. [Paragraph 2 of the Report’s conclusions and recommendations].

Oh dear. Never mind. MPs in the recent energy infrastructure debate were very enthusiastic about Carbon Capture, Utilisation and Storage (CCUS). That will save us, won’t it? If we can’t satisfy our power needs via renewable and nuclear power, then at least to the extent that we remain reliant on fossil fuels, CCUS will negate those nasty carbon emissions. What’s that you say?

Recently, in what the Department considers a signal to the sector, the Chancellor announced in the Spring Budget £20 billion for carbon capture, usage and storage. However, this technology is untested at scale in the UK, and this Committee has seen how previous government attempts to get it off the ground have failed repeatedly. [Paragraph 3 of the Report’s conclusions and recommendations].

Oh well, where there’s a will, there’s a way. The main thing is that net zero is all up side with no down side. It’s not expenditure, it’s investment. It will create lots of green jobs (even though there’s no sign of them yet), and they are a benefit not an additional cost. Everyone in Government knows this. All the departments of state are hand in hand and walking together, to the sunlit uplands of net zero. There’s absolutely no conflict, with total co-operation and agreement, isn’t there? Isn’t there?

It is not clear the Department has the support it needs from other departments to achieve government’s power sector decarbonisation ambition. While it holds responsibility for, and takes the lead for achieving energy security and net zero, the Department nevertheless must rely on wider government to achieve its objectives. The Department has offshore wind, hydrogen, electricity network and nuclear champions whose role includes identifying potential barriers, such as local planning issues and availability of the necessary skills in the workforce. Other departments are responsible for such wider issues, including the Department for Levelling Up, Housing and Communities for planning arrangements and the Department for Education for skills in the workforce. It is essential that, as the lead department for its objectives, it builds partnerships across government to successfully influence these and other relevant departments. However, this can be tricky when power sector decarbonisation activities may be in tension with other departments’ other priorities. [Paragraph 4 of the Report’s conclusions and recommendations].

Whatever the problems, at least we know that this is all necessary to get energy bills down, to save the long-suffering British public from the cost of living and energy crises. We’ll all be grateful when we start saving loads of money. After all, renewable energy is so much cheaper than fossil fuels (sic) that it’s a no brainer, a massive cost-saver. Yes?

The Department has not yet set out how it expects decarbonising the power sector will impact energy bill payers and taxpayers. While government recognises that initially it will rely heavily on private investment to fund the clean energy transition, the costs to build, maintain and operate the power system are typically passed onto consumer bills. The Climate Change Committee has estimated that future capital expenditure costs will increase running up to 2035 and then decrease along with operating costs, and government has estimated that £280 to £400 billion of public and private investment in new generating capacity will be needed by 2037. However, the Department has not yet assessed what this ultimately means for energy bill and taxpayers….

[Inserted from later in the Report – Section 2, paragraphs 17 & 18] [We questioned the Department as to how it is planning to protect consumers and taxpayers from the cost of decarbonising the power sector, particularly when a challenge of proceeding quickly is that deploying nascent technologies before there is a competitive market for them, requires taxpayer support. The Department told us that it is seeking to achieve its objective at least cost to the consumer, but confirmed that nascent technologies such as CCUS and small nuclear reactors will result in significant cost for both taxpayers and energy bill payers. It added that bill payers are not currently paying anything up-front for renewables, or the nuclear power station under construction at Hinkley. However, it confirmed bill payers would, should it go ahead, pay for a new nuclear power station at Sizewell before it is operational, using a form of financing called a regulated asset base that it believes would be cheaper in the long run.

Although the Department was unable to tell us when bill payers would see lower bills as a result of investment in zero and low-carbon generating infrastructure, it highlighted recent analysis by Ofgem that renewables funded by contracts for difference are reducing annual household bills by an average of £54.57 However, it acknowledged that in the context of recent unprecedented high wholesale gas prices, which are contributing to the increased cost-of-living, the benefit to consumers may seem inconsequential.]

….Energy affordability, driven by unprecedented wholesale gas prices, has been a significant contributor to the current cost-of-living crisis. In the future, how energy is bought and sold will depend on the outcome of the government’s ongoing Review of Electricity Market Arrangements. The Department expects reform of the retail market to result in more scope for suppliers to offer new tariffs that accommodate consumer demand flexibility, so bill payers can opt to reduce their bills by increasing their energy use when demand is lower. [[Paragraph 5 of the Report’s conclusions and recommendations].

OK, so it might not be cheaper, but since there’s a strategy in place to reduce demand, we will be better off as a result, won’t we?

We are not yet clear what the Department’s plans are in respect of energy efficiency and consumer behaviour. The Department acknowledges that improving energy efficiency and changing consumer behaviour are key to meeting net zero. However, recent energy bills support schemes have prioritised reducing costs to consumers over encouraging reduced demand for energy. In the 2022 Autumn Statement, the Chancellor announced new funding of £6 billion from 2025 to 2028 to improve energy efficiency for households, businesses and the public sector. The Chancellor announced that an Energy Efficiency Taskforce would be charged with improving energy efficiency in the UK by reducing energy consumption from buildings and industry by 15% by 2030 compared to 2021 levels. In March 2023, government announced a further £1.4 billion to support energy efficiency, including for low income households. However, government’s track record in implementing energy efficiency schemes is patchy at best. In December 2021 we reported that such schemes were often fragmented, and that stop-start policy was an obstacle to long term progress towards government’s energy efficiency ambitions. It is not clear what energy efficiency and consumer behaviour assumptions the Department used when modelling pathways to a decarbonised power sector. In February 2022 we reported that government often over-estimates consumer buy-in to its policies, including those aimed at reducing emissions. [Paragraph 6 of the Report’s conclusions and recommendations].

Look, do you have to be so remorselessly negative? What are you, some sort of climate deniers? What do you mean, you’re just realists, pointing out some uncomfortable home truths?

…achieving the government’s generating capacity ambition of 50GW of offshore wind by 2030 would mean overseeing the deployment of three times as much capacity in eight years as in the last two decades. Government estimated in its 2021 Net Zero Strategy that £280 to £400 billion of public and private investment in new generating capacity will be needed by 2037 (the Sixth Carbon Budget sets an interim emissions target for the period 2033 to 2037). These costs represent the infrastructure costs for power generation only, and do not include the costs for all aspects of power sector decarbonisation such as building and reinforcing networks or research and innovation on technologies. [Paragraph 3 of Section 1].

Talking of technologies, the MPs in the energy infrastructure debate were very enthusiastic about small modular reactors (SMRs). At least they will enable net zero to come in on time, won’t they?

…small modular reactors (so-called SMRs) which are a type of smaller reactor untested in the UK and not operating at scale anywhere globally. The Department considers that nascent technologies, some of which have not proven themselves viable when operating at scale, are nevertheless worth pursuing to ensure that the UK has a range of options from which to select its ultimate electricity generating mix and prevent it from being beholden to any particular technology…[Paragraph 7 of Section 1].

Well, if there are problems in reducing bills and in reducing demand, at least energy is being saved by an ongoing insulation programme, at modest cost?

The Department indicated that, for example, a requirement to ensure properties are at least EPC rating C has resulted in an increase in the homes achieving this standard from 14% in 2010 to 47% now. However, it told us the EPC rating C requirement depends on implementing it being cost-effective, affordable and practical to do so, and in the private rented sector there is an ongoing policy debate as to whether there is a maximum landlords should pay.

In its 2022 Autumn Statement the Chancellor announced new funding of £6 billion from 2025 to 2028 to improve energy efficiency for households, business and the public sector. The Chancellor announced that an Energy Efficiency Taskforce would be charged with improving energy efficiency in the UK by reducing energy consumption from buildings and industry by 15% by 2030, compared to 2021 levels. The Department told us that the Taskforce would align incentives across the private sector, households and government. In March 2023, government announced a further £1.4 billion to support energy efficiency, including for low-income households. However, government does not have a successful track record of implementing energy efficiency measures. In December 2021, we reported that government has previously implemented a number of energy efficiency schemes aimed at private domestic housing, for example The Green Deal and the Renewable Heat Incentive, and this fragmented, stop-go activity has hindered stable long-term progress towards government’s energy efficiency ambitions.[Section 2, paragraphs 21 & 22].

But net zero is incredibly popular. The Guardian and the BBC regularly share opinion polls that demonstrate the public is fully on-board with the project. None of the above criticisms and caveats really matter, because the public will come to our aid and will voluntarily make all the sacrifices that are necessary to achieve the glorious objective.

We also asked the Department about how government can influence consumer behaviour. The Department told us that its modelling of power sector decarbonisation by 2035 covers different pathways characterising different assumptions of consumer behaviour and energy efficiency (such as home storage), but acknowledged that it does not know which of those pathways we are on. We reported in March 2022 that significant uncertainty remains as to whether consumers will rapidly change their behaviours in line with the expectations of government’s Net Zero Strategy, and that government has a poor track record of engaging consumers, including over-estimating buy-in to its policies. [Section 2, paragraph 23].

Conclusions

What, then, can we conclude? I think we can safely conclude that the 16 members of the Public Accounts Committee (nine Conservatives, five Labour, one SNP, one Liberal Democrat) know that net zero is dead in the water. Unfortunately, unless I missed it, not one of them spoke during the energy infrastructure debate to ensure that their fellow MPs are aware of the serious problems. Unfortunately, it doesn’t seem as if any of the MPs who spoke in that debate (with the possible exception of Andrew Bridgen) have read the Public Accounts Committee’s report (or if they have read it, they haven’t taken on board the serious problems it identifies).

The other thing we can conclude is that the mainstream media aren’t too keen on the conclusions reached by the Public Accounts Committee. Unless I visit the wrong mainstream media websites, then it seems to me that this report has received only a tiny fraction of the attention and publicity lavished on the Climate Change Committee’s 2023 Progress Report to Parliament. On the day before it was released the BBC gave us this headline: Climate Change Committee says UK no longer a world leader and on the day of its release, it gave us two more headlines: Climate change: UK government told to insulate more homes and New report calls for government to do more on climate change. The BBC has a whole section of its website dedicated to the work of the Public Accounts Committee and it likes nothing better than to report (with suitably graphic headlines) on PAC reports, especially those critical of the government (e.g. Government overseen years of decline in NHS – MPs; Randox: UK government criticised over £777m contracts; Defra too reliant on outdated computers, MPs warn; Energy bills support took too long to get to people – MPs – that’s from the 58^th Report of the 2022-2023 session, by the way). And yet the 59^th PAC report of the 2022-2023 session is apparently not worthy of report. I wonder why that should be? I suspect I know the answer. It doesn’t fit the agenda. Isn’t failure to report an event, selective reporting of the work of the Public Accounts Committee, a form of misinformation, by omission? I wonder what the BBC’s climate misinformation team and BBC Verify Unit might have to say about this egregious omission? Nothing, I’m pretty sure.