November 30, 2024 - 8:00am
Without so much as a press release, Ed Miliband’s Department for Energy Security and Net Zero (DESNZ) quietly published a set of statistics on international energy prices this week. Coming as they did in the wake of the announcement that the Vauxhall plant in Luton is to close as a direct consequence of Miliband’s policies, with the loss of 1,100 jobs, it’s possible he hoped that if there was no official fanfare, no one would notice them.
For the figures are simply devastating. They show that large and very large industrial users in Britain — firms such as Vauxhall, owned by Stellantis — are already paying nearly three times more for the electricity they need to operate than the average paid by their competitors in the 14 Western European EU member states. This is before any of the measures Miliband and DESNZ plan to impose to create a “net zero” power grid by 2030 have taken effect.
As of June 2024, the last month covered by the dataset, large British firms were paying 27.91 pence per kilowatt hour (kWh) of electricity, and those in the EU just 10.80 pence. The difference faced by smaller companies was not quite as big, but was nevertheless formidable: such British firms are having to fork out well over double the EU average.
Yet back in July 2011, there was almost no differential for industrial users at all: the EU average price was then 7.04 pence per kWh and Britain’s 7.48 pence. Other figures, issued by DESNZ from data supplied by the International Energy Agency, show that the gap with America is even bigger, with US manufacturers paying just 6.48 p/kWh, less than a quarter of the sums being extracted from their UK rivals.
The reason for the widening gap, writes energy expert David Turver, is the bewildering thicket of subsidies, levies and carbon taxes created by past Labour and Conservative governments that is designed to shift UK electricity generation away from fossil fuels.
Miliband has frequently claimed that the transition to Net Zero creates jobs and will reduce energy bills, and is in the UK’s “national self-interest”. He has blamed high electricity costs on spikes in the price of the natural gas still being burnt in British power stations, caused by events such as Russia’s invasion of Ukraine.
However, Turver points out that other figures published by DESNZ this week cast doubt on this claim. In Britain, already heavily dependent on renewables, the price of electricity has risen much faster than that of natural gas — for which UK users pay five times as much as consumers in the US and Canada. The new figures show that electricity costs UK industry six times as much per unit of energy than gas does. In France, factories pay only 2.5 times as much; in Germany, it is three times.
“It is not the price of gas that is driving UK electricity prices higher,” Turver writes. “It’s renewables subsidies and their associated costs such as grid balancing, storage and extra spending on the grid.”
| EU Large Industrial Electricity Prices (p/kWh) 2011-24 |
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I’ve already suggested that the £296 billion Miliband claims it will cost to decarbonise the grid by 2030 is a grave underestimate — and that, under close scrutiny, many of the assumptions behind that figure are starting to fall apart.
Yet the figures slipped out this week suggest that the pending closure of Luton and other energy-dependent factories such as the Port Talbot steelworks will be the first of many caused by the energy price gap that already exists. And that, it should be remembered, will not protect the planet, as the economist Professor Dieter Helm pointed out in his 2013 book The Carbon Crunch. Countries such as Britain which export their jobs to China, where new coal-fired power stations are still being built with abandon, are increasing global emissions, for we all share one atmosphere.
Labour Party sources say that Keir Starmer has failed to confront the scale of the political and economic problems his Energy Secretary Miliband is likely to create, “outsourcing” this critical area of policy to a man who happens to be an old friend and North London neighbour. This could be a political weakness for Labour: Reform UK has promised to scrap Net Zero targets, citing their cost to the taxpayer, while it is an easy attack line for the Tories.
“We will not succeed as a nation if we have the most expensive industrial electricity prices in Europe,” former energy secretary and current Shadow Energy Secretary Claire Coutinho told me yesterday. “We must put cheap energy and living standards first. Ed Miliband’s plans to rush for renewables by 2030 are going to send electricity prices through the roof, and it’s not even clear he will be able to keep the lights on.”
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SubscribeOf course the cost may well drive efficiencies elsewhere rather than stasis. A question of balance.
How about we waste a little less? Not the sole answer but much as cheap migrant labour can kill the need to innovate so can cheap energy.
Dear oh dear…..
Yikes.
‘How about we waste a little less? ‘
How about we switch all our heating and transport to electricity?
How about we all just stay where we’re put and wear overcoats in the house?
You go right ahead and innovate your way back to the stone age. Cheap abundant energy is the foundation stone of modern society.
Like cheap migrant labour?
I’m happy to draw out the inconsistency in thinking as regards capitalism’s ability to innovate when forced to. We’ve adjusted before and we’ll do so again.
As regards Stone age, now of course they’ll be a significant number of naysayer Unherd subscribers but that could be exactly where we are heading without such change.
There are 165 other WTO members with far cheaper electricity to power my data centre or electric arc furnace or distribution centre with consumers whose disposable incomes used to buy my goods and services are not being savaged by the highest energy costs in the world.
The health and wealth of people and nations is almost exactly proportional to the usage of energy. It is cheap energy that drives innovation, efficiency, and improvements in the health of us and the environment.
How about we all stop heating our homes, travelling and manufacturing anything. Problem solved. Simples.
Why would we do that Rock? Why not just be more efficient? Simples.
It would be much less painful for you, I think, if you were to abandon now the fantasy that this government is going to be anything other than a slow-motion car crash that will end with the reduction of the Labour Party top a small rump in 2029. It would save you so much energy.
I think the direction of travel on this issue much bigger and with much more global momentum, for all the bumps, than any parochial debate about a current UK Govt.
I have been looking for a quote and I can’t find it so approximately:
If you have £1 million pounds to give away would you:
a) Give it to your family when 20 people would have better lives, or
b) Give it to individual families in Africa when 1000 people could be saved from starvation, or
c) Give it to a climate project which could save millions of lives a few hundred years from now.
Miliband et al have chosen option ‘c’. They believe that the world is going to burn out in the future because of CO2 levels, they believe that we have caused it and they believe that the UK can lead the way by not making anything because we won’t be able to afford the energy. In fact, the UK is choosing to be a poor, third world country and is also choosing to kill people today to save theoretical lives in the future.
This is a big decision for Mr Miliband to make. I have read hundreds of theoretical papers on the subject (it is my hobby) and it is absolutely 100% clear that the world is not going to burn in the future, that CO2 is not causing warming and, most importantly, that the UK has no effect at all.
Why is Mr Miliband doing this? The answer is either one of four things:
1) He enjoys the power trip.
2) There are too many vested interests at stake to change now.
3) He would be seen as stupid by his mates if he changed direction now.
4) He doesn’t actually understand what he is doing and he relies on the Civil Service. We all have confidence in the Civil Service, don’t we?
He was pretty useless in the New Labour government.
I’m led to believe that he developed his deep knowledge of physics and chemistry while working in the Complaints Department with Rachel.
Or he, or his mates are heavily invested in the sector…
Big Green is involved in the climate change racket now, and globally-speaking it is a multi-trillion dollar boondoggle over the next couple of decades. The corruption is so great that it is effectively unstoppable. Ed Miliband is nothing more than the current face of this process in Britain.
I don’t think you’re points 1 to 4 are mutually exclusive. I think it is ALL of them, plus a 5th which is that Milliband is unremittingly, irredeemably stupid.
Milliband is unremittingly, irredeemably stupid
You really are being far too kind.
I still think it is because he is a socialist. Socialists like people to be poor. They see poverty as a state of grace.
Utter Coital Bovine Scatology
China who openly describes itself as a Socialist Capitalist
Economy has lifted out of poverty in the last 12 years
‘800 million of its citezens
400 million of whom we’re in total poverty
Furthermore by way Of BRI and BRICS a further 200 million from participating Nations have
Also been lifted out of poverty
That totals one billion people
Now tell me how socialists like people to be poor
Tis the elite powerful neo Liberal Capitalism and neo Western colonial powers that adore making people poor
How the else can they make money
In the UK alone Austerity has lead to over 300, 000 premature deaths amongst the abandoned working classes ( more than COVID killed )
And life expectancy dropping rapidly
Fret not because you in the middle class are next and they about to start with severely diminishing your pension pots
As so little left to loot and plunder from to enrich themselves
Oh and they will not stop there next up is your property
Which fails miserably now to keep pace with inflation
Thereby severely diminishing the REAL purchasing power of the sale proceeds
You and your kind are none other than Sheep being driven up the ramps of the Lorry by The Collie dogs of the Elite and it’s lackeys in the Main Stream Media
And not having a clue that the Lorry you been herded into
That when the ramps close and it drives off the next stop is the Abattoir of shortened lives and induced reduction in your wealth
Honestly do any of you think Reform UK or Right wing Parties are going to reverse this
Quite the opposite my dear fellow their heavy boots shall thump the accelerator of the Abattoir bound lorry
Whilst you bleating sheep sing
God Save The King
Is all four not an option?
5) It’s become a religion for him. Original sin; apocalyptic punishment; precarious chance of salvation; eye-watering sacrifice to appease the angry gods.
There’s no logical reasoning with fanatics.
While I agree with much of what you say, the claim that CO2 is NOT causing an overall increase in world temperatures is refuted by all the scientific evidence we have, including direct measurements from space. Human industry is certainly pumping more CO2 into the atmosphere globally (whatever minnow Britain is doing); we have known CO2 is a greenhouse gas for 150 years, and there is no doubt that temperatures across the globe are rising. If you want anecdotes, we can all see the receding glaciers with our own eyes, and this is not just a localised effect. Correlation does not prove causation, but this would be some coincidence, and none of the other possible explanations hold water.
None of this however is a reason for pursuing disastrous impoverishing NZ policies, as Bjorn Lomborg has been rationally and persuasively arguing for many years.
There is a very good reason why correlation does not prove causation, two in particular. Correlations that should be there under the hypothesis but aren’t, another is alternative hypotheses that the correlation may be consistent with. Among the former is the rather obvious one that glaciers were receding before CO2 kicked in. These two absentees in the “consistent with” chain of argument go under the name of prosecutor fallacy.
You missed 5) He is a socialist.
So much of modern politics seems to follow a two-step plan:
1) Dictate a policy
2) Hope the technology is developed to make it possible
when, of course, a wiser, more prudent course of action would be to develop the necessary technology first, ensure it works and produce it in sufficient quantities, and then enact the policy. But that would require our politicians to be sensible, pragmatic, principled, and wise, something even less realistic than the two-step plan.
I’m not so sure. Your suggested 2 step approach implies that there must be a recognition by the political classes, however microscopically small, that the concept of implementation does in fact exist.
I am more inclined to the view that it is a three step process:
1) Dictate a policy
2) Errrrr……
3) That’s it!
Isn’t “collect underpants” in there somewhere?
Is that how the Americans put a man on the moon?
We didn’t launch a man to the moon and then assemble the rocket around him on his way there, no.
The policy was set, and then the technology was created.
Should make China happy – extra opportunities for their cars and solar panels , made with a fossil fuel energy component outside the UK “green economics” . Their progress towards renewable energy pays more regard to physics ?
“When ignorance is bliss …….” Thomas Gray 1716 – 1771
prophesying Labour Energy Policy 2024
Credit where it’s due here – the Conservatives did a lot of the work here – most of the graph showing the increases was during Conservative governments. Labour’s really pushing it up and to the right, but they started with plenty of momentum.
But Miliband is in a class of his own for idiocy.
There’s hardly been a politician speaking up honestly about this and opposing it for the last 15 years. Hard to know if they don’t undertand or just don’t care. Or both.
That’s the problem. If you keep voting for the uniparty, why would things ever change?
Reform UK have pledged to scrap the Net Zero mandate. This was one of their policies in their GE manifesto.
Seriously every other problem pales in comparison to this one. Industry runs on power, if you’ve made power more expensive then everything else is going to get worse. More immigrants can be absorbed more wealth can be generated more infrastructure can run when electricity is cheaper.
But hey at least the champagne socialists get to feel good about themselves for a little while.
Here is a genuine question. Is it possible that UK electricity prices are higher than the rest of Europe because the UK system is private but the EU ones are run by their respective states?
If you give all the wrong incentives to the private sector, it’ll deliver all the wrong results, albeit very possibly more efficiently than the public would have done.
What about the US being cheaper than the EU?
Indeed I thought that, but the US system has it’s own issues and may not be comparable, so let’s stick to the EU.
All this Net Zero project is being driven on the basis of forecasts. One thing I can tell you about forecasts, even one year budget plans, is that they are rarely as accurate as you believe.
The Climate Change Bill was presented to Parliament in 2005, 19 years ago. Maybe it is time to revisit the doom laden prophecies that justified the bill and audit the reality 20 years on.
Known as the Ed Miliblackout strategy in our household.
I thought our electricity prices were the highest in Europe. In our general election last Friday, the Greens lost eleven of their twelve seats.