We need a sensible dialogue on ever-increasing energy demand
Miliband must use his convening power as a Secretary of State to engage in one.
So far, so normal today. At time of writing, the UK is currently generating 12% of its power from fossil fuels with wind (52%), nuclear (11%), biomass (7%) and France (7% via interconnectors) doing the heavy lifting.
As we move into Spring, we can expect this mix to become a more regular state of affairs compared to the Dunkelflaute months we have just experienced. This will provide a lot of relief for the energy sector as it has not been a good winter for the decarbonisers: more grey, windless days than usual have seen gas reserves depleted and the highest energy prices that we’ve seen in the past 12 months.
This has not gone unnoticed by the Net Zero sceptics who, throughout this winter, have been quick to make two arguments. First, that decarbonisation by 2030 is impossible with the technology we currently have available. Second, that the drive to Net Zero is giving the UK some of the most expensive energy in Europe priced as it is through Contracts for Difference (CfDs) which subsidise renewable energy contracts and the way consumers are billed according to the price of the costliest molecule of energy that they use which is always gas.
It's hard to make a case against the first of these arguments and Net Zero advocates have struggled to do so. The technology isn’t there – battery storage is a very helpful technology and improving all the time but it’s nowhere close to being able to store enough power to supply the UK with the high demand that Dunkelflaute creates.
And nowhere close means, in this case, never. We can build all the offshore wind farms that we like, and under Labour and Ed Miliband we will, but the UK is going to have to keep and, critically, maintain, an entire shadow gas-fuelled power system that can deliver up to 50 GWs of energy in the heart of winter. That is going to be expensive, and the consumer is going to have to pay for it. The only ways out of that problem are a major shift in energy storage technology, more nuclear power and a reduction in energy demand and none of those are easy or likely.
This is the reality that Miliband knows he’s going to face and he would have been much better off, as this column has advised many times, in recognising, as he came into office, that the Conservative government of 2010-24 had delivered a major change in how the UK is powered with emissions per kilo-watt hour declining from 500g in 2012 to just above 100g in 2024. That’s real progress whether you like it or not. Instead of promising a revolution that’s already taken place, Milliband should have said he would build on the work already done.
The Net Zero sceptics’ second argument is much weaker. Miliband is always going on about how our dependence on gas is pushing our fuel bills up because he’s right. Between 2012 and 2020, the cost of power in the UK wiggled around between £40 per kilowatt hour (KwH) and £60 per KwH and spent most of its time at the bottom end of the range. And why? Because in the same time period, the price of natural gas was unbelievably stable. When gas prices rose as economies opened up post-pandemic and after Putin invaded Ukraine, electricity bills rose accordingly.
Don’t take my word for it. Here’s European Commission President, Ursula Von der Leyen, in 2022, “The current electricity market design – based on merit order – is not doing justice to consumers anymore. They should reap the benefits of low-cost renewables. So, we have to decouple the dominant influence of gas on the price of electricity.”
Claiming that renewables and the drive to Net Zero is behind our bills going up is not credible - not when the link between the gas price and the electricity price is so clear - and the Net Zero sceptics are taking us for fools by suggesting this so. It’s also wrong to claim, as so many sceptics do, that the UK has the highest power costs in Europe: we are at the top end of the table but we are not outliers by any means. The cost per KwH to end users in January 2025 in the UK was, according to the Household Energy Price Index (HEPI), lower than Denmark, Germany and Belgium, roughly the same as Ireland, Switzerland and Austria and only a touch higher than France and Italy.
The Net Zero sceptics are, as so often, half wrong and half right but it’s not just them that are taking the public for fools.
Miliband is equally guilty not only for promising a Net Zero target that he knows can never reach but also for not using his convening power as a Secretary of State to have a sensible dialogue about energy demand. Until we talk about a future of ever-increasing demand, which, to be fair, Net Zero sceptics often pray in aid, and how we will meet and manage that demand, then everyone will continue to be wrong about Net Zero, advocates and sceptics alike.