Govt Underestimates Net Zero Housing Refits By £300 Billion
By Paul Homewood
The Global Warming Policy Forum (GWPF) has welcomed a new parliamentary report that accuses the government of seriously underestimating the cost of decarbonising Britain’s homes.
The cost warnings by MPs has serious repercussions for owners of energy inefficient homes who face the prospect of unsellable properties just over seven years from now.
The Climate Change Committee (CCC) has recommended that no UK homes can be sold from 2028 onwards unless they meet the minimum Energy Performance Certificate rating. According to the House of Commons Environmental Audit Committee 19 million home owners would have to spend an average of £18,000 to reach that target.
Last year we warned that the capital cost of decarbonising housing was likely to approach £1 trillion. BEIS and the Committee on Climate Change, however, are insisting it can all be done on the cheap. Now at least some of their misleading claims have been exposed by MPs,” GWPF director Benny Peiser said.
The report, from the House of Commons Environmental Audit Committee, says that bills may run to an average of £18,000 per property, with the cost of heat pumps to be added, but without even considering the costs of installation larger radiators that will be required in most homes.
The Committee’s own estimates, however, are still too conservative. The committee’s £5000 figure for installing heat pumps is simply not credible.
It is clear from the committee’s report that BEIS was highly deceptive in its cost estimates while BEIS and the Climate Change Committee still refuse to publish their cost calculations. They need to come clean with the public.
Dr Peiser warned that the astronomical costs of Net Zero risks becoming toxic for the government in coming years.
The economy is in tatters and yet the government expects struggling households to spend tens of thousands of pounds to comply with its Net Zero agenda. The government should reject the Climate Change Committee’s recommendation on decarbonising buildings or face being responsible for making millions of homes unsellable.”
For further information see
Net Zero cost-sheet: The Cost of Decarbonising Housing
https://www.thegwpf.com/gwpf-welcomes-recognition-public-has-been-misled-over-net-zero-costs/
While the Committee has criticised the government, it must also be pointed out that the Committee on Climate Change came up with virtually the same costings as the government have in their Net Zero plan two years ago. However they also reveal that the CCC put an overall cost of £250 billion for decarbonising homes, including low carbon heating systems.
The new, higher costings are based on detailed estimates provided to Leeds City Council:
An average cost of £19300 for 19 million homes adds up to a bill of £366 billion. As GWPF rightly point out, installing heat pumps/radiators will be much more than the estimate of £5000, probably at least £15000, as the BEIS themselves state:
In any normal world, the Environmental Committee would be calling for a full inquiry into these costs, before any further action was taken.
Instead they want the government to press on even faster with the programme, without stopping to ask themselves who is going to pay the bill.
The basis of their argument is, in any case, wholly flawed. They claim that energy efficiency is vital if the UK is to meet its climate targets.
This is balderdash. No matter how energy efficient homes are, they will still need energy. If this can be supplied by wind power, then simply build more wind farms.
Instead, it gives the impression they know that the country cannot be run on renewable energy alone, and that energy rationing may be the norm in years to come. Get your homes insulated, if you don’t want to freeze!
This whole saga is just another chapter in how successive governments and the CCC have sought to cover up the crippling cost of the Climate Change Act and Net Zero. Inadvertently the Environmental Committee have just let one of the cats out of the bag.
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NOT A LOT OF PEOPLE KNOW THAT 
To get an estimate so wrong is one of two things wilful incompetence or a wilful intention to deceive. Which is it?
or….. is it a demonstration of the fact that none of them take this seriously so any old numbers will do based on the thinking that if the electorate is that stupid to want this nonsense then they are too stupid to notice when the numbers are Boll1x
What choice does the electorate have in this anyway? The only solution is for either a mass abstention or preferably spoiling of ballot papers as that shows dissension better.
All to “support” socialist causes (all of which carry the stench of marxism)… imposed by a “Conservative” Government!.
Where is the skilled labour force to do this?
And what will they do after the labour demand bulge has passed?
Import all the materials and components.
Import the labour force.
Import the Management.
But we can provide the Consultants to hold the clip boards.
They won’t be able to import the materials, the labour force or the management if everyone is doing the same!
The Consultants will be ok however.
My final 2 penneth…. Government has a long history of gross underestimating the cost of any project but to underestimate the estimate…..me thinks foul deeds are afoot!
As prof. Gordon Hughes of Edinburgh University has recently shown through forensic accounting, “The assumptions which underpin the BEIS estimates of the cost of generation for wind and solar power are fanciful, and do not withstand even cursory scrutiny; under close analysis they disintegrate. Indeed, they are so far from the actual costs incurred by current operators and recorded in audited accounts that they are not worth further consideration. The question is how a government department in a major economy can have strayed so far from the real world.” (See http://www.ref.org.uk/Files/performance-wind-power-uk.pdf at pages 39 and 40)
In his talk to accompany the above paper prof. Hughes raises the larger problem of financial instability:-
“There is a larger issue behind the story of individual project risks. This concerns the stability of the financial sector. In the UK and several other European countries governments, central banks and financial regulators have actively promoted green finance. They argue that banks, money managers and pension funds should increase their lending to and investment in wind farms and similar projects as part of their wider social responsibility. However, if many such projects are very risky – as is clearly the case – this pressure is a betrayal of their fundamental duty to protect the stability of the financial system. It is no different from urging financial institutions to finance speculative property developments at the beginning of a property crash.
The likely response is that general advice does not override the obligation of lenders and investors to identify good and bad projects. That position highlights the central problem. There are no good offshore wind projects without either huge subsidies or much higher market prices. Government policy is based on assumptions that can be shown to be wrong with any reasonable amount of due diligence. Financial institutions that do their job properly are likely to be condemned for failing to support the shift to green energy. Most of them will prefer not to look too hard and to go along with the short term pressure.
This is an old and disreputable story with only one outcome, so everyone should face up to what will happen. Financial institutions will do as they are told and join the party. In roughly a decade the likelihood of large future losses will become all too obvious and asset write-downs will jeopardise both loan security and investment returns.”
(See https://www.ref.org.uk/ref-blog/365-wind-power-economics-rhetoric-and-reality below Fig. 8)
In addition to the huge subsidies and/or electricity price rises (Hughes estimates a factor of 3 or 4 rise in prices) there is also the major problem of the energy consumed in the construction of the current renewables; they are unsustainable or even anti-sustainable. However, that is a problem for another comment as this one is already long enough.
Regards,
John.
In 2007 -2010 these institutions bought mortgage backed securities repackaged as caviar. They didnt look to see what was in the tin ; unfortunately it was cod roe! Result – the subprime financial crisis.
It seems history is repeating itself.
Deutche bank is still a zombie bank as a result.
https://en.wikipedia.org/wiki/Subprime_mortgage_crisis
https://en.wikipedia.org/wiki/Mortgage-backed_security
government have no idea about money. Only need to see today’s reports on the ongoing cost of lockdown to realise that they just cannot grasp the significance of the numbers
I note we all have to have heat pumps.
My house (100% owned) is in the middle of a small development of modest 2 bed 2 story houses. My annual energy bills are currently ~ £1100, good double glazing, loft insulation and gas fired CH.
My land plot is ~ 6m wide by 40m deep, on the East flank of the Penines in West Yorks. All the other plots are similar. That means my heat pump has a vertical block of coal measures strata 240 sq m x the drilled depth to the heat source, to exploit. All the plots are the same, therefore me and all my neighbours will be pumping heat from the same horizon heat source, with multiple adjacent wells. How long will the heat source last before depletion sets in?
As a mining engineer, I am familiar with my local geology and we are very far from any major source of geothermal heat – so the depletion will set in early and advance to a rapid steep decline. It is a living scandal that beneath my feet are trillions of cu mtrs of proven natural gas, just waiting to be tapped, with the necessary infrastructure in place. The crass, mass, ass stupidity of this green scheme beggars belief. It would be hilarious if it was a spoof. Sadly it’s for effing real.
Brian Jackson.
Brian: your claim of “trillions of cubic feet of natural gas” if you are not talking about shale is new to me. Can you give a refence?
Ha ha ha ha! You aren’t going to have the money, anyway.
One fundamental of the law which seems to go against one of the most basic human rights is to have a ban on anyone doing a mutual deal with someone else to sell them something at an agreed price. To ban someone from selling a property without certain requirements is fundamentally wrong. The buyer will obviously adjust what he pays according to what he gets. This abuse of human rights was very obvious when the government imposed a requirement for an insulation survey before a property was offered for sale but no one seemed to question this.
As far as the banks go, if they continue to offer to fund green initiatives with such abandon, I am sure their investors will take flight when they realise that their money is being poured into a bottomless abyss.
Some years back Govt. rolled out their ‘Decent Homes’ programme. Much of this involved encouraging the sticking of highly inflammable materials to the outside of buildings by way of insulation.
Against expert advise. Govt. continued on their merry way regardless.
Result – fires, horrible mass deaths, mass bankruptcy for home buyers.
Govt. ministers move on.
(in one example – to stand for election as mayor for the West of England).
No justice – nothing learned.
Simply move on to the next scam.
Business as usual.
I would bet a lot of money that listed homes will get an exemption from this requirement. Those with architectural merit might also get a bye and owners will be able to argue their case. This should protect the rulers but the rest of us will, as ever, have to deal with the problem. Which ever is the outcome you can bet your life that Lord Debden will find a way round it.