The true cost of Ed Miliband’s drive to Net Zero is likely to run to billions more than official figures suggest, a report warns.
Government estimates are based on ‘fantasy assumptions’ and the real cost could exceed even the highest official predictions of £7.6trillion, according to the analysis.
The report comes as energy bills continue to increase despite Energy Secretary Ed Miliband’s election pledge to reduce them by £300.
Energy analyst David Turver, author of the Institute of Economic Affairs (IEA) report, said: ‘The various public bodies responsible for working out the costs of Net Zero… have made fantasy assumptions about the cost of renewables and low-carbon technologies. The true cost of Net Zero is much higher than we have been led to believe.’
The IEA report looked at estimates from Government bodies including the Climate Change Committee (CCC) and National Energy System Operator (Neso).
The CCC claimed that achieving Net Zero between 2025 and 2050 will cost £108billion – down from earlier estimates of over £1trillion.
Mr Turver said that this was due to ‘implausibly low’ projections of the cost of renewables and borrowing rates, rather than falling costs.
The true cost of Ed Miliband’s drive to Net Zero is likely to run to billions more than official figures suggest, a report warns
Mr Turver said that this was likely to be a ‘considerable underestimate’ given recent failures of offshore wind projects and rising costs (stock)
Mr Miliband is expected to outline proposals next month for grants worth £13billion for insulation, heat pumps, solar panels and home batteries as part of Labour’s warm homes programme
Neso, the body responsible for running Britain’s power networks, predicted that Net Zero would cost £7.6trillion.
But Mr Turver said that this was likely to be a ‘considerable underestimate’ given recent failures of offshore wind projects and rising costs.
He added: ‘If these costs were widely understood, public support for Net Zero would be at risk.’
Claire Coutinho, the shadow energy secretary, said: ‘It beggars belief that none of our ‘independent’ energy bodies can publish an accurate figure for what Net Zero is going to cost this country.
‘Wildly optimistic assumptions and crippling groupthink in our institutions means we’re flying blind – and the result is the highest electricity prices in the world and our industry fleeing overseas.’
Reform UK Deputy Leader Richard Tice said the report ‘shows the real cost of Net Zero will be many trillions of pounds, and will not reduce the cost of energy’.
Last week, official estimates of the cost of Net Zero from Neso put the price at £4.5trillion over the next 25 years.
Mr Miliband is expected to outline proposals next month for grants worth £13billion for insulation, heat pumps, solar panels and home batteries as part of Labour’s warm homes programme.
But Government data published this month showed that electricity generation from fossil fuels rose last year.
A spokesman for the Department for Energy Security and Net Zero said: ‘We reject this analysis, which assumes there are no costs associated with staying on the fossil fuel rollercoaster.
‘The only way to bring down energy bills and deliver energy security is by making Britain a clean energy superpower.’
