Chancellor Ed Miliband announced early last week that no new licences would be granted for North Sea oil and gas exploration. As has been reported, the UK still has strong (and inelastic) demand for both fuels, which would result in greater reliance on imports in future, with negative implications for jobs (particularly in Scotland) and the balance of payments. Then on Friday Miliband announced that he was giving the go-ahead for three large-scale solar farms in Lincolnshire and Suffolk, overturning previous planning refusals.
Net Zero has become the mantra stressed and repeated by every UK politician except Reform UK. It will change the way we invest in infrastructure, it will change our manufacturing base and opportunities, and if implemented, it will change our own lives beyond recognition, especially in transport, travel, building and heating use. It will limit our freedoms and will probably be eye-poppingly expensive. We are still in the very early stages of this planned revolution and very little is visible yet.
But before we abandon 250 years of fossil fuel energy use, maybe we need to ask ourselves: what does net zero mean?
At a simple level, the argument goes like this: Burning fossil fuels releases CO2 into the atmosphere. CO2 is a greenhouse gas. All other things being equal, this warms the planet. Warming the planet due to human activities can have unintended (bad, or very bad) consequences, so let’s stop this pollution. This position is logical, although the details are debatable.
But is this really the purpose of the UK’s net-zero pledge? The answer is a resounding no. The UK produces less than 1% of global carbon dioxide emissions and forcing it to zero will have no real impact on global emissions. According to the International Energy Agency, the increase in global emissions in 2023 is 410 million tonnes, 107 million tonnes higher than the UK’s annual carbon dioxide emissions of 303 million tonnes. So bringing the UK’s emissions to zero is more of a commitment than it is actually delivering real change.
Some would say it’s important to demonstrate commitment, and I agree in some circumstances. Seeking justice for individuals denied their rights abroad is a good example. Showing support for Ukraine, even if the military contribution is minimal, is a good example. If this commitment to net zero were free, it might make sense to pursue it (by example) and convince the big emitters (China, India) to plan serious reductions.
But the UK’s net zero ambition will by no means come for free. Although the amount is currently unknown, the project is likely to be the most expensive government initiative outside of war that the UK government has ever undertaken. If you think I’m exaggerating, let’s look at some facts.
Onshore wind turbines at Little Chain Court Wind Farm
The power grid must be able to produce around 45GW of peak demand and supply the entire population at all times of the day and night, winter and summer. In our highly interconnected modern world, power outages would be disastrous. To prevent blackouts, energy must always be available. The only way to do this is to have energy ready, stored, and ready to be converted into electricity quickly (within seconds, not minutes). Battery technology is not yet developed enough to store grid-scale electricity, and even if it were, it would be prohibitively expensive to install. Currently, the world’s largest battery is in California and can power the UK grid for around 3 minutes under normal use. This battery costs around $1.5 billion.
In the middle of winter, we can experience high pressure periods where the air is still and fog forms. In the past, these have lasted for at least 10 days. Therefore, if we were to rely entirely on renewables, we would need at least 10 days of power storage, and in reality even longer storage to handle extreme conditions. Where will the power/energy come from if we get virtually nothing from renewables?
There are alternative sources, but not enough to power the entire grid. Nuclear power is declining as old plants are retired, and will continue to decline despite the massive Hinkley Point project. There are interconnectors that allow us to import power, but this can be expensive, and there are not enough to power the grid. It is unlikely that we will be able to build enough carbon-free backup facilities (using what energy sources?) to get through the winter months in the 25 years between now and 2050.
So governments would have to rely on fossil fuels, which means maintaining a full gas supply infrastructure and paying gas power plants enough to keep them running and maintain enough capacity to feed into the grid on their own in rare cases, which means we would need at least 200% capacity (100% renewables and 100% gas), which would necessarily keep energy prices high and we would never be able to reach net zero because of the gas component.
To keep the lights on, the cars, trucks and trains running, and the homes and offices warm, we will not be able to get anywhere close to net zero by 2050. Our electricity prices are already among the highest in the world, which makes heavy industry and many other sectors uncompetitive. So the much-vaunted green economy will actually mean consulting and construction work. The electric cars will come from China, the wind turbines from Denmark and China, the solar panels from China.
So is this level of disruption and economic pain worth the little joy of signalling support for net zero? No, of course not.
My suggestion is that we stop signaling and resolve to decarbonize as (and when) the world does so too. I mean, right now we are 1% of emissions (and by the way, 1% of the world’s population), so instead of net zero, why not declare that we will get in “carbon lockstep” with the world and not exceed 1% of global emissions.
That is not a fantasy, but a realistic promise, so that we can move away from these huge, expensive and uncertain projects and get to work improving people’s lives by increasing productivity, investing in industries and sectors where we have a competitive advantage, improving the NHS, paying doctors and teachers more, and generally improving people’s lives.
Neil Record is a former Bank of England economist and author of The Legacy of Sir Humphrey.
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