The Climate Change Committee welcomed some changes but said others make net zero harder to achieve.

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

Bit by bit, we are learning the truly horrifying cost of Net Zero.

Over the years of course successive governments as well as the Committee on Climate Change have tried to pull the wool over our eyes, avoiding specifics and instead talking in generalities about green jobs and economic growth.

The first chink appeared in 2019, when Philip Hammond’s Treasury team put an estimate of £1.2 trillion on it, a figure which the government at the time did its best to hide and discredit.

Since then various independent estimates have suggested the real costs might be even greater.

The National Infrastructure Commission (NIC) has just published its Second National Infrastructure Assessment, which has looked in detail about the projected costs, and it backs up what the Treasury feared four years ago.

These are the key takeaways:

Up to £35 billion per year between 2025 and 2050 of investment in renewable generation capacity and flexible sources of generation, electricity grids, and hydrogen and carbon capture and storage networks
£2.5 billion per year between 2024 and 2050 to decarbonise public sector buildings by deploying heat pumps, heat networks and energy efficiency
£12 billion per year to cover the extra costs of replacing gas boilers with heat pumps, most of which will be financed by the government rather than homeowners.
300,000 EV chargers – no cost is given, but it is likely to be in the region of £30 billion.
Add that lot up, and we are looking at over £1.3 trillion. And all of these investments are superfluous. We already have plenty of gas generating capacity, most of which should still be in working order in 2040. We also have a working grid that has no need of extra storage, and is capable of handling existing demands. And of course, we also have efficient heating systems and motor vehicles. All of this extra expenditure is therefore of no benefit.

But that is only the start. The NIC, for instance, assume that EVs achieve price parity with ICE cars by 2030. They currently cost at least £10K more, and there is no evidence that this will change significantly in the foreseeable future.

If we assume this price difference lasts until 2040, the extra cost would amount to £230 billion in the 2030s alone.

By the nature of the beast, a lot of these costs are front loaded in the next decade or so. So although cost pressures might ease after 2040, costs will be particularly heavy until then. Hence the NIC’s suggestion that the government should provide zero interest loans for household heat pumps, the idea being that homeowners can pay them off in instalments, in the hope they don’t notice them!

But providing interest free finance is merely one more hidden cost that the government must bear. Money does not grow on trees, so the government will find yet more debt servicing costs added to an already unsustainable public deficit. Worse still, this money that they will need to borrow will drain resources away from more productive investments.

But there is one more glaring underestimate. The NIC claim that annual household energy bills will be £1000 lower eventually, thanks to “wonderfully cheap renewables”. But the report’s small print tells us that all of their energy costings are based on the government’s latest Electricity Generation Costs report, published in August this year.

And lo and behold, this tells us that the levelised cost of offshore wind is £44/MWh at 2021 prices. The recent CfD auction of course failed to get any offshore wind bids at a higher price than that. And studies of the real costs of construction indicate that the true cost is double this assumed cost.

Worse still, the report also states that the cost of CCGT generation is only £54/MWh, when the fictitious cost of carbon is taken out.

In short, our electricity bills will increase and not decline. Not only that, but a doubling of offshore wind costs will add hundreds of billions more to that investment bill.

There is no recognition either in the NIC report of the fact that heat pump running costs are higher than a gas boiler.

So when we add all of these extra costs in, as well as the cost of interest and the tendency for official estimates to be too low, we could easily be looking at a total bill of £2 trillion and more.

But even the £1.3 trillion works out at £48 billion a year, and that’s £1700 for every household in the country every year.