Labour Unveils Carbon Neutral Plans

By Paul Homewood

Labour have just published their plans for a zero carbon Britain.

It is basically just a rehash of the CCC’s plan, but accelerated with an objective of zero carbon by 2040. Nowhere is there any mention of what is happening to global emissions.


Below are the targets for 2030:




The report is remarkably short of any data on costs, unsurprising for Corbyn’s party, but it does offer this:


1.9% of GDP amounts to roughly £40bn a year. Bear in mind, this is just the annual cost up to 2030. The CCC reckon that costs will increase as we get closer to 2050, because the easy actions will already have been carried out.

But, with the help of a magic pen, the report calculates that there will actually be a net benefit to the UK economy of £800bn by 2030. It’s amazing how spending money ends up saving a fortune! You would have thought every country would be doing the same if it was so easy!

But more on that later.

First, the four elements to the plan:

1) Energy wastage

This involves retrofitting almost all of the UK’s 27 million homes by 2030. It is not clear who will end up paying for this. Will the government, for instance, pay for the well off to insulate their own homes?

If we guesstimate a cost of £10000 per home, you would be looking at a cost of £270bn, or £27bn a year if we start now.

Given that many homes are already well insulated, have condensing boilers and double glazing, any further improvements won’t be cheap.

And, of course, the real question is how do the energy savings stack up against the costs?


2) Decarbonising heating

The report merely follows the CCC’s route of heat pumps and hydrogen for heating, although it acknowledges that hydrogen cannot be rolled out in bulk until well after 2030.

The first part of the plan therefore is to convert all homes to electrical heating by 2030. This will mean more than 25 million homes. According to the CCC, the cost of installing air heat pumps and associated equipment is around £10000, so we have a cost of £250bn for this part of the plan.

We also know that heat pumps are more expensive to run than gas boilers, so there will be no offsetting saving.



Homes will still need their existing heating systems, as neither heat pumps nor the grid can meet peak demands in cold weather. For that, they will eventually need to convert to hydrogen. As the report notes, there are huge obstacles in the way of a hydrogen solution, and we are a long way from even rolling it out.




One particularly interesting section of the report has this to say about electrolysis, which is often bandied about as the answer to all our problems, not least energy storage:


It is something I have been arguing for a long time – that electrolysis is not a large scale or cost effective solution, either to heating requirements or as a store of surplus renewable power. 


3) Renewable electricity

This is based around increasing wind and solar capacity to 82 GW and 35GW respectively (currently 22 GW and 13 GW):


Wind and solar are projected to provide 74% of total generation by 2030:



Dispatchable capacity, from gas, nuclear and biomass, is set at 55 GW, well below likely demand. The report does not appear to mention what peak demand will be, but based on total generation, it would look to be about 65 GW.

Arithmetically, the generation numbers broadly stack up, but this assumes that all of the renewable output is usable and available when it is actually needed. More on this in the next section, but first a quick look at costs.

The report mentions a recent study by UCL, which looked at how the grid could run stably with a high renewable penetration. Based on a similar mix to the Labour one, UCH reckon the Levelised Cost of Electricity will work out at £90/MWh. This includes the extra cost involved of transmission grid enhancements, storage etc.

Current wholesale prices are around £50/MWh. With projected annual generation of 392 TWh, the extra £40/MWh will cost £16bn a year. This tallies with the report’s finding that higher energy prices could cost between £10.6 and £16.4bn a year. (Though they claim that this will be offset by reduced energy usage, this does not factor in the extra cost of insulation etc):




4) Balancing the system

The $64000 question!

The report goes into some detail on all of the problems with weather dependent renewables, but offers little idea how it can be managed, other than trotting out the usual mantra of battery storage, smart meters and interconnectors.

There seems to be no recognition of the enormous storage which would be needed to meet seasonal variations in supply and demand, a problem which smart meters cannot help to solve. Nor is there any concern raised about our reliance on imported electricity.

There is a lot of wishful thinking in the report, that viable solutions will be found. Nevertheless, it accepts that we will need to maintain the current backup gas generation, just in case!





5) The Economics

We must now return to the claim that, despite spending hundreds of billions on decarbonisation, the economy will actually be £800bn better off.

This is based around the fallacy that all of these new green jobs will boost GDP, incomes and government revenues:


This is a nonsense.

All of the resources needed for the decarbonisation programme, labour, materials and capital, all have to be taken from elsewhere in the economy. GDP growth can only result if they are used more productively.

All the evidence, of course, points that other way. The hundreds of billions spent will not create extra wealth, as it will only replace what we have already got.

By coincidence, Jeremy Warner wrote a piece yesterday, claiming that fighting climate change could reboot the world’s economy, just as Roosevelt’s new deal did, (rather missing the point that there was mass unemployment back then).

It earned this riposte:





6) Green jobs

As mentioned, the report peddles the green job illusion:



I noted earlier that no costs were given for the retrofitting of homes for energy saving. But the new jobs projection offers a clue. At an annual cost of say £50000, 459,500 jobs would cost £23bn a year. My guesstimate was £27bn.

£50000 per job may sound high, but is not unreasonable when employment costs, travel and materials are added.

And there is a further drawback – what happens to these 459000 workers, when all homes are retrofitted in 2030? Back on the dole queue?

The obvious question though is where will all of these new employees come from? In practical terms we pretty much have full employment.

In fact the report actually notes that these are not necessarily additional jobs:


Moving workers around from one industry to another may look good on a socialist economic planning board, but is quite another thing in the real world.

But will a worker at an oil refinery or car factory be happy to lose his job and become a double glazing fitter instead? Or move to Grimsby to work on offshore wind farms? And the idea that the new jobs will be better paid is pure fantasy.

And let there be no doubt about this. This plan will cause massive dislocation to UK industry and impose intolerable costs.

I find it extraordinary that the Labour party would come up with proposals which will inevitable result in massive upheaval, heartache and loss of income to so many workers up and down the country.

And all at a cost of over £50bn a year!


October 26, 2019 at 07:18AM

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