Labour’s plan to switch to a clean power system by 2030 faces “significant challenges” to avoid delays and prevent vulnerable households paying higher bills, experts have warned.
The UK Energy Research Centre (UKERC) has said there is “very little room for error” in meeting the government’s plan to create a 95% low-carbon electricity grid by the end of the decade.
The government has promised that the move to cleaner electricity will ultimately mean lower bills because the UK’s exposure to volatile global gas prices will be reduced. But there has been no official cost comparison provided for its 2030 clean power target compared with the previous government’s 2035 deadline.
In its annual report, the UKERC said that consumers expecting that a higher use of cheap renewables “would translate into lower energy bills” would probably “be disappointed” that Britain’s National Energy System Operator (Neso) has “not been clearer in its commentary on the direct cost impact of changing the generation mix”.
The researchers said: “Nonetheless, reduced exposure to the volatility of the global gas market is an important benefit of the transition and there are policy options that have the potential to reduce electricity bills in the short term.
“However, policymakers face significant challenges both in delivering clean power within the timeline the government desires and doing so in a way that ensures consumers benefit.”
A spokesperson for Neso said the direct impact of the government’s clean power agenda on consumer electricity bills depends on “policy design and market dynamics”. Its official advice to the government indicates “the hurdles that need to be overcome to deliver the benefits of clean power to consumers, the economy and society, including Britain’s energy security”.
UKERC, which is publicly funded but independent of the government, said that there are “questions about the deliverability” of the target for the end of this decade.
The researchers said: “There are perhaps even bigger challenges post 2030” when the whole electricity system needs to expand and the multibillion-pound costs of retiring Britain’s gas pipelines could fall on consumers.
The UKERC said a plan for funding and retiring the UK’s gas network is “desperately needed” as the country shifts towards clean energy.
Gas infrastructure is expected to remain a key part of Britain’s energy security beyond the 2030 clean power target, but there are concerns over how the network will be funded as consumers shift to clean home heating systems to cut greenhouse gas emissions in line with the government’s climate targets.
UKERC warned that, in the coming years, network costs would be split between a diminishing number of customers, pushing up prices. The shift is expected to hit vulnerable people such as renters and low-income households hardest because they are likely to be least able to make the shift away from gas.
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The cost of disconnecting customers from the gas grid could climb to as high as £29bn, and the job of physically dismantling the pipelines could cost £25bn, according to UKERC.
A “whole system plan for the retirement of the network is desperately needed” with decisions on the technology mix for home heating, clarity on boiler phase-out dates, the role of hydrogen, and even potential nationalisation of the network, the report said.
Jess Britton, a co-director of UKERC, said: “The energy transition must not leave anyone behind. Ensuring that vulnerable communities share in the benefits of this transition is a moral and practical imperative.
“Focusing on energy efficiency, targeted support and inclusive policies will help address inequalities and ensure everyone has access to cleaner, cheaper, and warmer homes.”
A government spokesperson said: “The government has a plan to make Britain a clean energy superpower so we can end our energy insecurity. As shown by National Energy System Operator’s independent report, clean power by 2030 is achievable and will deliver a more secure energy system, which could see a lower cost of electricity and lower bills.”