Net-zero Emissions Target: Affordability

Lord Howell of Guildford Excerpts

Thursday 3rd April 2025 Lords Chamber

[Lord Howell of Guildford (Con)]

My Lords, I am certainly not a climate denier. I believe that world emissions are continuing to rise quickly, despite all our efforts and all the warnings of the noble Lord, Lord Stern, and many others, and the difficulties of controlling the climate seem to be growing rather than decreasing. I am not even against having targets of a kind. Ambitions and targets are all right for Governments to have, as long as people are not misled into thinking that if they spend enough money it will all work when it does not. I am certainly not against John Keats and many of his associates as well; that is a lovely world we all aspire to. But I want it to work for a modern economy and a modern society of social stability rather than bitterness, division and real suffering by millions of people.

There are two gigantic question marks over the present path of our policy. I do not want to get into partisan points, but you can say the pathway was set in the past, but it seems it is being followed with zest at present. These worry me a lot. We are fooling ourselves if we ignore the real problems of these two gigantic questions.

The first is cost. The costs for net zero range widely. The official figure, from the Committee on Climate Change, is £1.4 trillion; it is £3 trillion, according to National Grid; figures of £6 trillion to £10 trillion are batted about as well—Net Zero Watch has those very high numbers; and the Energy Technologies Institute has said that the cost of decarbonising housing alone could be up to £2 trillion. So we are talking about the most enormous resources, and it is irresponsible not to ask in detail where on earth they are going to come from and who is going to pay. I am looking at the capital side—I have not come to consumers.

The Government do not have any money—they say that all the time. We all want a lot more. There are endless demands; there is a huge defence bill looming. The financing of this whole gigantic transition will have to be predominantly from private sources, private capital, working in new forms of co-operation with public capital. There is a whole area of thinking on this, which was addressed very interestingly in the New Statesman about two weeks ago, on how new forms of co-operation can be developed between government and the private sector—there is plenty of money in the private sector around the world, ready to invest in Britain—and how that can be done with entirely new thinking, getting away from the old, stale ideological debates about state and markets. I would love to hear a lot more of that coming out than we hear at present. Not much thinking seems to be going on in that area: too much old ideology, not enough new ideas. That is the first question.

The second question is: where is the clean electricity coming from to replace the whole negativism, the whole abolition of oil and gas, that is hoped for and will of course take many years—perhaps until 2030, 2035 or even 2050? That has to happen if we are serious about a form of net zero and decarbonisation. People are very reluctant to give an answer.

The official line is that we are going to need about 200 gigawatts in all, against our present figure of 65 or 70, of which half, on average throughout the year, comes from renewables at present. Of course, it will be much more in the future. The snag is that for 3,000 hours throughout the year, which is about one-third of the year, there is no wind around the entire British Isles. There is a major intermittency problem, and it has to be addressed. An intermittency fulfilment by generating enough electricity at the rate which I think is coming—about 300 gigawatts or 350 gigawatts—is very expensive, for the simple reason that it cannot be used to earn profits all the time. It sits there idle, and someone has to pay.

We know what the answer is. We know that we must let our much-diminished nuclear system, which was run right down, be restored. There are some huge decisions to be taken: some for SMRs, which are the small, new technologies, and others—I look on this with great reluctance—for still plodding along with the old white elephant giant technologies. Those are full of risk, with investors reluctant to go near them and demanding enormous government input of resources, and, of course, charges on consumers.

There is a proposition I find incredible, following Hinkley, and which is in deep trouble. The chairman of the managing body, EDF, has just been sacked by the French Government and it has been advised not to invest further in foreign areas and to concentrate on cheap electricity for the French. The proposition is to replicate this very bad example at Sizewell. It seems absolute madness and the wrong direction. We should be going for SMRs; the order books are filling up. Other nations are ordering SMRs on every side, and we will be late in the queue. We should get on with it now.

That is the necessity and, unless we face it, we can order new combined cycle gas stations—indeed, we are doing so, because we can see that the so-called decarbonisation by 2030 is going to involve more gas, not less—but the carbon from them will have to be captured by new schemes, of which one, I think, has been commissioned. In fact, we need about 10 or 15 of them, but we have not started on that. The hope of getting there by 2030, however much we spend, is very remote and thin indeed. It is a delusion, and a very dangerous one, which the public will turn on angrily when they realise they have been misled.

It is possible to get a cleaner, better society and an energy transition. In the past, it has happened through markets; this time we are trying to make it happen through the activities of government itself, which is much more difficult, but possible. Whatever we call it, honesty and reality will have to be faced on an unprecedented scale, and that should be a matter for extreme concern in the minds of the governing party.