Energy Policy is not front and centre of this election campaign. However, Ed Miliband took to X last week to claim that a report cited by Claire Coutinho, the Energy Secretary supported his claim that Labour’s 2030 clean power plan would save people money on their energy bills.
As a reminder, the Conservatives have set a target to decarbonise the grid by 2035 (NZ2035) and Labour wants to accelerate that by five years and deliver a Net Zero grid by 2030 (NZ2030). Time to dig into the report, examine Ed’s claim and the accuracy of the analysis.
The report in question was published in March 2024 by Policy Exchange, which acknowledges the modelling work was carried out by Aurora Energy Research. The report and associated slide deck and data book can be found here. Policy Exchange describes itself as the most influential think tank in the country. Aurora was founded by some professors from Oxford University and claims it is the largest dedicated power analytics provider in Europe. However, as we shall see below, it looks like doubling the brains on this report has halved the collective IQ.
Problems for Ed Miliband
The first problem for Ed is that the consumer costs in the quoted post from Aurora Energy Research cannot be found in the report, slide deck or data book. At the bottom of its thread, it does say you can get in touch if you have any questions. I did reply to its tweet thread asking what it meant by “total consumer costs” and how it arrived at them. Sadly, I have not received a reply.
The second problem for Ed is much more substantial. The slide deck says on page 6:
Technological and policy barriers are unlikely to be overcome to reach Net Zero in the power sector within the timescales of current political targets.
In other words, we are unlikely to hit a Net Zero grid by either 2030 or 2035. It goes on to say on page 25:
Further accelerating Net Zero in the power sector to 2030 requires more extreme policy action and is likely to be out of reach.
To give a flavour of how unfeasible both plans are (see p19 of the slide deck), to achieve NZ2035 requires the pace of offshore wind deployment to accelerate by a factor of three, from about 1GW per year to 3.2GW per year. However, the pace of offshore development needs to increase six-fold to meet the NZ2030 target.
In other words, a Net Zero power grid by 2030 is simply not going to happen.
However, the headlines are only the start of the problems for Ed Miliband, Policy Exchange and Aurora.
Missing Grid Costs
The Aurora slide deck (p28) says that to achieve a Net Zero grid by 2030, we will need to spend £116bn on wind and solar capacity up to 2035. As an aside, it also says we would need to spend a little less or £105bn to achieve the same thing by 2035.
However, despite acknowledging that the extension of the transmission grid must be accelerated, it appears to have glossed over the costs of this grid expansion. The National Grid ESO has announced £54bn of spending on the electricity transmission infrastructure up to 2030 and a further £58bn in the 2030-2035 period, a total of £112bn. These extra grid expansion costs broadly double Aurora’s cost estimates. Moreover, given that there is expected to be additional demand on the grid from electric vehicles and heat pumps by then, even more spending on the distribution network is likely to be required.
Missing Generation Capacity Costs
The Aurora slide deck (p7) indicates that to achieve a Net Zero grid by 2030 or 2035, extra generation capacity will be required in technologies such as BECCS, gas with carbon capture and storage (CCS), hydrogen gas turbines and both long term and battery storage.
However, some of these technologies do not yet exist (BECCS and ‘gas-plus-CCS’) or are extremely expensive (hydrogen and battery storage). Yet, it has not included a cost for this extra spending.
Unrealistic Costs of Renewables
The capital cost estimates it uses for renewables are also unrealistically low. Working through Section IV of Aurora’s data book, it assumes capex per GW of installed capacity can be calculated.
It indicates that to hit a Net Zero grid by 2030, a total £116bn will have to be spent on renewables capacity by 2035 (p28), with £93.5bn of this by 2030. This spend would deliver 26GW of solar power, 12.5GW of onshore wind and 36GW of offshore wind. The bulk of the money, nearly £70bn of the £93.5bn will be spent on offshore wind.
It indicates an additional 36GW of offshore wind would need to be installed by 2030, giving a spend of £1.9bn/GW of capacity. By way of comparison, the 3.6GW Dogger Bank offshore windfarm is currently under construction and in 2021 was estimated to cost £9bn, and in December 2023, the cost estimate had apparently increased to £11bn. This gives a cost per GW of £2.5bn/GW (2021) or £3.1bn/GW (2023) which are 29-58% more expensive than Aurora’s assumption. Dogger Bank A was awarded its Contract for Difference (CfD) at £39.65/MWh (2012 prices) in AR3. Since then, strike prices have gone up considerably with developers being offered £73/MWh (2012 prices) or £102/MWh (2024 prices) for new offshore wind in this years’ AR6 auction.
Moreover, even Aurora says that the CfD subsidy scheme needs to be updated to prioritise securing capacity over price competition. Any way you look at it, Aurora’s estimates are way too low.
Similarly, Sneddon Law onshore windfarm recently came online with a reported spend of £50m to deliver 30MW of installed capacity. This works out at £1.7bn/GW, some 70% above Aurora’s assumption of about £1.1bn/GW.
In addition, Aurora assumes that 26GW of solar power will be delivered by 2030 at a cost of £10.8bn. This is around £415m/GW. However, the most recent Government figures show the median cost of installing solar panels for 10-50kW installations was £1,376m/GW in 2023 or more than three times Aurora’s estimate. Larger solar farms may well be cheaper, but they are unlikely to fall to anywhere near Aurora’s estimate.
In summary, Aurora’s cost estimates for new renewables are ridiculously low, meaning its overall spending estimate is similarly too low.
Fantasy System Costs
Aurora’s report does not repeat the claim in its tweet about consumer costs being £109/MWh in a Net Zero by 2035 scenario or £107/MWh (or 10.7p/kWh) if we achieve a Net Zero grid by 2030.
However, we can challenge these numbers in two ways. First, if we spend more money earlier in the NZ2030 scenario than in the NZ2035 alternative, then any discounted cashflow model would put system costs higher under NZ2030.
In addition, the latest Ofgem price cap is 22.36p/kWh plus 60.12p daily standing charge. For a typical household usage of 2,700kWh per year this works out at a total cost of 30.5p/kWh or 2.8 times Aurora’s NZ2030 calculation.
The current day ahead wholesale price for electricity set by gas is £73/MWh or 7.3p/kWh, so the full retail price is approximately four times that of the wholesale cost. The basic CfD cost of currently installed offshore wind CfDs is around £145/MWh or 14.5p/kWh.
The idea that total retail prices can fall by two thirds and come in below the current price of offshore wind after a further spend of £200-300bn or so by 2030 is clearly for the birds.
Conclusions
Aurora is assuming costs for renewables that are a fraction of what we know apply in reality. It has also left out the costs of grid upgrades, BECCS, hydrogen storage and carbon capture. There are hundreds of billions of pounds missing from it analysis. The cost savings it claims are completely spurious.
It would not be surprising if the actual cost of delivering a Net Zero grid by 2030 is three times Aurora’s estimate once realistic costs are considered. The total consumer cost estimate from Aurora is clearly an untruth based on fantasy assumptions that bear no resemblance to reality.
It is not easy to be sympathetic to politicians. However, when they are fed shonky reports from thinktanks that purport to be the most influential in the country, it is easy to see how they become caught up in Net Zero mania.
However, when Ed Miliband seeks to use the report to claim his Net Zero grid by 2030 will save money when such a dodgy report clearly warns his plan is “likely to be out of reach”, then any sympathy that might have been forming rapidly evaporates.
Our democracy is in real trouble when misleading and false claims are made to justify policy action when the reports those claims are based on are built on such dubious assumptions.
David Turver writes the Eigen Values Substack page, where this article first appeared.
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There’s also an increase in alcohol consumption, that can raise the risks of gout.
Methinks that’s rather a case of coincidence of consumption of alcoholic drinks and lots of junk food.
High wine consumption is linked with gout – it’s generally believed that high alcohol consumption leads to over-production of uric acid, which causes gout. Some say red wine in particular, and although my father-in-law is only a sample size of one, he has gout and no one else I know drinks more red wine…
High wine consumption is linked with gout – it’s generally believed that high alcohol consumption leads to over-production of uric acid, which causes gout.
The teetotallers will link everything to alcohol, be it dying of thirst, because of their a priori convicton that everything bad which happens to humans must be caused by it. In reality, nobody really knows what causes gout and nobody’s much interested in knowing, either. It’s a fairly harmless albeit painful disease whose symptoms can be handled with the the usual suspects medication.
What is “junk food”?
Food which should be thrown away before eating due to its atrocious quality. This applies to most of everything which can be bought in all of these street food outlets.
“The number of cases has risen by 20% in three years, with 234,000 patients admitted to hospital with gout in 2021/22, NHS Digital statistics show.”
That’s 234,000 candidates for bogus covid-19 diagnosis, then.
Might not be worth reading in full, but I like the image of the character under the headline! Reminds me of the occasion in early 2020 when he was allegedly admitted to hospital in London (St. Thomas?) with C-19. There was a report from that place as to what his weight was; not nice (the value quoted, not the publication of it!). Apart from what the Mail says, I think it is likely that being overweight can screw up one’s immune system in general. In particular, at least one of our important vitamins (D) tends to be fat prevalent.
In simple terms, being obese tends to make one more vulnerable to a range of different infections, such as the, err, common one under consideration.
I am shocked that people diagnosed with gout are hospitalised.
Agreed.
Gout is predominantly a genetic disorder caused by overproduction or reduced excretion of uric acid.
Inflammatory episodes my be triggered by alcohol, certain dietary factors, dehydration (possible with a heat wave and/or water shortage) or trauma.
In my experience outpatient diagnosis is frequently incorrect as a correct diagnosis relies on aspiration of joint fluid and the finding or monosodium urate crystals in the fluid.
Even that can sometimes give an incorrect diagnosis.
Since Covid “vaccines” have become prevalent I have seen a huge increase in presentations with acute joint swelling.
Some of these have been labelled as gout by ED staff.
I have performed multiple joint aspirations on these patients as well as other investigations, and found very few to be caused by gout.
My conclusion is that Covid “vaccines” cause inflammatory joint swelling in a proportion of patients.
I have seen no increase in gout presentations.
It is very rare for a patient to be admitted to hospital for gout.
Many thanks for this in-depth explanation.
Very interesting. A friend gets gout and he doesn’t drink alcohol but has to put up with all the comments that go with being diagnosed.
My first post so be gentle with me.
My first cynical thought was that, as gout is a consequence of excess purine intake (port and red wine, but also red meat and, curiously, fructose – https://pubmed.ncbi.nlm.nih.gov/16234313/) this story would be yet another flag-waver for the insect diet. I was gratified to find this – as yet uncensored – little gem which notes the high levels of purine in several edible insect species. https://www.wageningenacademic.com/doi/abs/10.3920/JIFF2018.0023
While still playing into the pockets of Big Pharma ref drug based treatment options, the best, cheapest and most effective solution is the phrase ‘oi lard*rse, stop stuffing your face with cr*p and get some exercise’.
Excellent first post so please keep them coming.
Pleased to welcome you aboard.
Thanks!
Seconded!
Gout may be caused by excess histamine consumption and/or production. Foods high in histamine include prawns, seafood, oily fish eg salmon, cured meats, aged cheeses, avocado, pickles, wine, sherry and port, and foods which trigger histamine production include egg whites eg in meringues and macaroons, chocolate, citrus fruits, horseradish, shellfish, strawberries, and some nuts …. basically my favourite foods ( when not eating gluten, at which times my favourite food is pizza!
), and traditionally central to the diet of the rich.
I did think that the swollen and tingling toes said to be part of covid symptoms at one point might be something else.
A very powerful instant anti-histamine is vitamin C, which is a relief! ( I had an attack recently, with the odd nausea it can cause too, after eating a bit more sashimi, seafood, and avocado than I’m used to, and drinking plum wine and sherry with them )
Lemons are very useful as they are usually much richer in vitamin C than in their histamine triggers. And high-strength soluble vitamin C tablets will also usually work to relieve symptoms.
Some people are more sensitive to/prone to histamine “storms” than others.
Histamine is essentially an inflammatory reaction, and can be exacerbated by stress …
Sunshine , and Vitamin D, on the other hand help to down-regulate the immune system’s tendency to inflammation … A lot of people may have lost out on their usual doses of Vitamin D over the last 2 years. ( Rich people used to avoid the sun because white skin was prized as sign that didn’t have to work ( outside )).
Interestingly, ( to me anyway
), in the context of covid, “long covid”, and the changes in behaviour and diet that lockdowns caused, ( less time outdoors and different foods eaten because at home ), excess of histamine consumption and/or production can cause not only the swollen, red, sore fingers and toes and stiff aching joints which may be diagnosed as gout, but also the following:
Chronic inflammation
Tingling/numbness in hands and feet
Difficulty regulating body temperature and an increased tendency to sweating
Hives, rashes, itchy skin, flushing
( Quite frightening ) racing heart/heart palpitations
Low blood pressure
Difficulty/obstructed breathing, sinus issues, bronchitis
Post-nasal drip, persistent throat clearing, weepy eyes
Digestive disturbances/distress
Headaches, dizziness
Anxiety/feelings of dread
Insomnia
Chronic fatigue
Thyroid disruption and all that can lead to; energy and mood disorders among other things
Histamine has a systemic effect on the body. And lockdowns may have had a significant effect on people’s levels of histamine by keeping them indoors, ( out of the sun, with no holidays to top up, with resulting loss of vitamin D which would normally keep inflammation in check ), and by perhaps encouraging increased consumption of the higher-histamine foods which are usually the most expensive or only present in small quantities in restaurant dishes but somewhat cheaper/more affordable when bought in supermarkets.
With adequate exposure to ultra violet B from the Sun being our source of power to create our own vitamin D. Otherwise, we need supplement it via our diet. Not going out enough can therefore be contradictory to good health. Worth noting that other animals that spend time outside, such as grazing the fields, do the same thing – even through their fur, which UV B penetrates.
Did Saint Boris and his merry men expect a nation in perfect health, after he literally criminalised exercise? The consequences of the hallowed lockdowns are coming in thick and fast, just as we said they would.
As for gout: Hyancinth Bucket (lockdown snitch personified) once said “gout comes from an excess of good living”, when she made Richard pretend he had gout, instead of a mere fungus infection.
“Over-Eating and Lack of Exercise During Lockdown Has Triggered Huge Increase…” in illnesses, both physical and mental across much of the UK population.
It is important that the correct perspective is taken when the health of the community at large is under discussion.
Once you accept that many other health issues could be substituted for ‘gout’ it is nigh on impossible to refute the conclusion that all of this is intentional.
Stating the obvious but the government (and opposition) are clueless (or ambivalent) about health issues. Do they even have a policy on orthomolecular (nutritional) medicine? Of course they won’t, it’s not profitable enough to them.
But they probably have shares in the elastane/spandex/Lycra ® industry?
Reminds me of The Fast Show and ‘Does my bum look big in this?’
So nobody thought that sitting around, doing nothing but bingeing on delivered food, whilst boozing to excess would have a negative impact on their health? Truly, common sense is not very common.