Ed Miliband announced early last week that no new licences for North Sea oil and gas exploration would be granted. As has been reported, since the UK still has strong (and inelastic) demand for both fuels, the net effect of this is to increase our future dependence on imports – bad for jobs (particularly in Scotland) and bad for the balance of payments. Then on Friday, Mr Miliband announced that he had given the go-ahead to three large new solar farms in Lincolnshire and Suffolk, reversing previous planning refusals.
Net Zero has become a mantra emphasised and repeated by UK politicians of all hues, Reform UK excepted. It is changing the way we invest in infrastructure, changing our manufacturing base and our manufacturing opportunities, and will, if pursued, change our own lives beyond recognition, particularly in our use of transport, travel, building and heating. It will restrict our freedom, and is likely to be eye-wateringly expensive. We are still in the very early stages of this planned revolution, so little of this is visible yet.
But just before we abandon our 250-year history of fossil fuel energy use, perhaps we should ask ourselves “What is the point of Net Zero?”
At a simplistic level, the argument goes like this. Burning fossil fuels emits CO2 into the atmosphere. CO2 is a warming gas. Other things being equal, this warms the planet. Warming the planet through human agency may bring (bad or very bad) unintended consequences, ergo, let’s stop this pollution. This position, while debatable in detail, is logical.
But is this actually what the UK’s Net Zero commitment is doing? The answer must be, emphatically, no. The UK emits less than 1% of global CO2 emissions, and forcing that down to zero will have an immaterial effect on global emissions. According to the International Energy Agency, the increase in global emissions in 2023 was 410 million tonnes (MT), 107MT higher than the entire annual UK CO2 emissions of 303MT. So our reducing ours to zero is signalling commitment, rather than actually making a material difference.
Some might say that signalling commitment is important, and in some contexts I agree. Pursuing justice for a single individual denied it in a foreign country is a good example. Showing support for Ukraine, even if our military contribution is quite marginal, another good example. If this Net Zero signalling was free of charge, it might make sense to pursue it to try to persuade (by example) the big emitters (China, India) to plan serious reductions.
But the UK’s Net Zero ambitions are far from free. In all likelihood, although the amounts are unknowable at this stage, this project is likely to be the most expensive Government initiative bar War that the UK Government has ever embarked on. If you think I’m exaggerating, let’s look at some of the facts.
The electricity grid needs to be able produce around 45GW peak demand, and to supply all the population night and day, winter and summer. In our interconnected and sophisticated modern world power cuts are disastrous. To prevent power cuts, energy must be always available, and the only way to have that is to have it ready, stored, and able to be converted into electricity immediately (and I mean within seconds, not minutes). Battery technology is nothing like developed enough to store grid-scale electricity, and even if it were, it would be fantastically expensive to install. The largest battery in the world at the moment is in California, and it could power the UK grid in normal use for about 3 minutes. That battery cost about $1.5bn!
In the dead of winter we sometimes have high pressure weather which brings still air and fog. It has lasted at least as long as 10 days in the past. So if we are to rely entirely on renewables, we need to have at least 10 days electricity storage, and in practice much more to cope with extremes. Where is the electricity/energy going to come from if practically nothing is coming from renewables?
We do have alternative supplies, but nothing like enough to power the whole grid. Nuclear generation is falling as old plants are retired, and will keep falling despite the massive Hinkley Point project. There are interconnectors that allow us to import electricity, but this can be expensive, and nothing like enough to power the grid. In the 25 years between now and 2050 it is inconceivable that we can build enough carbon-free back-up facilities (using what energy source?) to get us through those winter months.
Hence Governments will be forced to fall back on fossil fuels. This means that we will need to keep a full gas supply infrastructure in place, and pay Gas generators enough for them to choose to keep their plants open, and to maintain enough capacity to power the grid pretty much on their own on rare occasions. This means we will have to have at least 200% capacity (100% renewables plus 100% Gas), which will inevitably mean energy prices will stay high, and that we won’t reach Net Zero because of the Gas component.
To keep the lights on, the cars, lorries and trains running, and to heat our houses and offices, we will simply not be able to get anywhere near Net Zero in 2050. We already have some of the highest electricity prices in the world, and hence we cannot be competitive in heavy manufacturing and much else. So the much-vaunted green economy will in practice mean some consulting and construction work. Electric cars will come from China; wind turbines from Denmark and China, and solar panels from China.
So is this level of disruption and economic pain worth the modest pleasure of signalling that we support Net Zero? No, of course not.
My suggestion, is for us to stop signalling, and decide to ensure that as (and when) the world decarbonises, we do too. So today we are 1% of emissions (and by the way, also 1% of the world’s population). So why don’t we say that we will stay in “Carbon Lockstep” with the world rather than Net Zero, and commit to never being more than 1% of global emissions.
That is a realistic promise, rather than pie-in-the-sky. Then we can stop this enormous, expensive and uncertain project, and get on with improving the lives of our citizens with increases in productivity; investing in industries and sectors where we have a competitive advantage; improving the NHS; paying doctors and teachers more, and generally making the lot of ordinary people better.
Neil Record is a former Bank of England economist and author of ‘Sir Humphrey’s Legacy’
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