Renewable Energy: Costs

Baroness Finn Excerpts

Thursday 14th November 2024 Lords Chamber

[Baroness Finn (Con)]

My Lords, I declare my interests as set out in the register, specifically my chairmanship of Project Tempo, a non-profit organisation which researches public attitudes towards the energy and climate transition. I thank my noble friend Lord Frost for this important and timely debate.

My right honourable friend the leader of His Majesty’s Opposition is right that we need to tell the truth. Over the last few years, successive Governments have set more and more ambitious emissions reduction targets, without a plan for how to meet them. We urgently need an honest debate about the different pathways to decarbonising our economy. The road is paved with trade-offs, and we must choose which ones to make.

I want to make two observations. The first is that British voters overwhelmingly support the ambition of getting to net zero. Project Tempo’s research shows that the public care about protecting the environment and want us, as a country, to do the right thing. However, it also shows that public support for green policies declines dramatically when individuals are asked to pay for them through higher energy bills, prices or taxes.

The second observation is that British energy prices are going in the wrong direction, and have been since well before the war in Ukraine. Data from the energy department shows that between 2010 and 2023, domestic electricity bills almost doubled in real terms, and data recently published in the Financial Times showed that the UK’s industrial electricity costs were among the highest in the world, more than four times those of the United States or China, and significantly higher than those of all other G7 economies. This is a profound challenge.

Our globally uncompetitive energy costs not only damage our productivity and economic growth, they risk undermining public support for the transition. If people come to associate green policies with higher bills, it will become much harder to maintain the public support that we need to reduce emissions and tackle climate change. That is why I was worried to read last week that the Institute for Fiscal Studies has said that Labour’s plans for clean power by 2030 will see green levies rise by an average of £120 per household by the end of the decade. The recent report from the National Energy System Operator also suggested that energy system costs could rise as a result of Labour’s plans.

We ought to pursue the mix of technologies that will reduce energy bills, protect national security and drive growth in our economy. Unfortunately, the Government’s policy will do exactly the opposite. Their ideological rush towards accelerated targets will send prices higher and exclude the development of other forms of clean energy such as nuclear, which would help us hedge the costs involved in decarbonising the grid. Can I press upon the Minister the importance of new nuclear and ask him to set out briefly the position on the Wylfa plant in Ynys Môn?

We must tell the truth about the challenges we face, not pretend that inconvenient facts do not exist. The reality is that many of the Energy Secretary’s current plans entail borrowing enormous amounts of money and spending it on subsidising technologies which are not otherwise viable on the open market, or on importing more products from China. Before the election, the then Opposition promised that their plans would cut consumer energy bills by £300. That claim—which they continue to stand by—is bogus. My fear is that false promises such as that, and their general rush to accelerate the transition, risk undermining the very environmental action which so many of us wish to see. I look forward to hearing how the Minister will address these legitimate concerns.