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Business Secretary misleads on Net Zero costs

October 21, 2021

By Paul Homewood

 

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Net Zero Watch today condemned the inaccurate and misleading statements about current and future energy policy costs made by the Rt Hon Kwasi Kwarteng MP, the Secretary of State for Business Energy and Industrial Strategy (BEIS).



Mr Kwarteng was interviewed by Nick Ferrari on LBC. Asked about the costs of the Net Zero transition,[i] he said that “I don’t think tax rises are inevitable” and added that the “green transition” over the last ten years had seen coal replaced mostly by renewables “and the costs haven’t gone up”.

As a matter of public record, Mr Kwarteng’s statement is untrue. The “Fiscal Outlook” published by the Office for Budget Responsibility (OBR) shows that subsidies to renewables, which began in 2002, now add £10 billion a year to electricity costs.[ii] This figure does not include all the increased system management and grid expansion costs. The OBR’s table is reproduced here for the avoidance of doubt:

The direct subsidy schemes are the Renewables Obligation and the Contracts for Difference scheme, which supplement the incomes of renewables generators. The OBR also correctly includes the cost of the Capacity Market, which is required to stabilise the electricity system in the presence of unreliable wind and solar generation. It should, however, be noted that for technical reasons the OBR currently does not report in this table the costs of the Feed in Tariff schem (FiT) for small renewable generators, such as rooftop solar. However, these also increase electricity prices to consumers. The cost can be found in the Ofgem’s Feed-in Tariff: Annual Report, which reveals that payments under the FiT scheme in Year 10 were £1.5 billion.[iii]

Mr Kwarteng’s suggestion that “costs haven’t gone up” is therefore manifestly false and suggests that he has only the weakest grasp of the facts.

Further evidence of his lack of understanding can be found in an interview with the Today programme on 20 October.[iv] Asked on what grounds he predicts in his introduction to the Net Zero Strategy text that there will be “up to £90bn of private investment in the green transition by 2030″ and “What evidence is there for that heroic scenario of £90bn private investment?” Mr Kwarteng replied:

We the evidence that we have is what happened in the last 9 years […] Now I can tell you in terms of the offshore wind deployment we’ve already had, seen £100bn in the last 9 years deployed in offshore wind, in one particular renewable sector. So, it’s not a heroic assumption to say that by 2030 we will have attracted an additional £90bn.

However, as noted above, subsidies to renewables are extremely generous, and the huge investment in wind power is entirely motivated by them. Examination of the official records of the Renewables Obligation and the Contracts for Difference schemes, held by Ofgem and the Low Carbon Contracts Company, show that total subsidies to wind now amount to £6.1 billion a year, with £4.4 billion of that sum going to offshore wind. In essence the investments in offshore wind are not private money at all, since the electricity consumer is forced by law to de-risk the investment and carry the cost. No private capital would come forward without the guarantee provided by the subsidy. Mr Kwarteng’s statement is therefore deeply misleading.

Mr Kwarteng came under pressure from the interviewer in discussing home heating, and was forced to concede that even if the cost of heat pumps fell from the current level of £10,000 and upwards, they would still cost what for many households was “a lot of money”.  The BBC presenter then focused on the issue of the cost to private individuals of the government’s policies:

…if people are going to have to insulate their own homes and they are going to have to try and make the switch from gas boilers to heat pumps […] this is all going to cost people individually a lot of money, isn’t it? […] We are individually going to have to pay if Britain is going to reach its [Net Zero] target.

Astonishingly, and in apparent contradiction of his admission that heat pumps would still cost “a lot of money” Mr Kwarteng replied: “No, I don’t agree with that at all”. the BBC interviewer expressed his surprise “What, individuals aren’t going have to pay if Britain wants to be carbon neutral by 2050?”

Mr Kwarteng evaded the question by turning to the overall economic impact and refusing to discuss the impact on individuals:

No….as far as our economy, the green challenge if you like represents an enormous opportunity. […] It’s not true to say that the green transition will cost us economically. In fact, I think it represents an economic opportunity.

Mr Kwarteng then went on to repeat the claims he made in speaking with LBC – that the introduction of renewables had not caused an increase in consumer costs. This, as we have shown above, is untrue.

At one point in the discussion the BBC interviewer asked Mr Kwarteng “Why can’t you be straight with people and say that people might have to change their lifestyles, people might have to fork out a lot of cash to contribute to this target?” Quite.

https://www.netzerowatch.com/kwarteng-misleads-on-policy-costs/?mc_cid=e8b5d79d9d&mc_eid=4961da7cb1

38 Comments
  1. Douglas Dragonfly permalink
    October 21, 2021 2:47 pm

    Right unhounerable bullying crook more like !

  2. Ilma630 permalink
    October 21, 2021 3:13 pm

    “that people might have to change their lifestyles”?? Might?? It’s a certainty, not just a possibility. The cost of a heat pump and the necessary insulation work is going to hugely curtail families spending on other things. It’s not the Magic Money Tree!! How and why does Kwarteng not understand that??

    • Douglas Dragonfly permalink
      October 21, 2021 3:24 pm

      Because he will not let the details get in the way of a good story.
      These people our not running the country –
      they are ruining it.

    • FrankSW permalink
      October 22, 2021 9:49 am

      That lifestyle change may be more drastic than you think.

      These “adjusted” lifestyles always assume that the 7 billion or so are still around but scrabbling around in feudal poverty. This proposed “sustainable” eco lifestyle with reduced resource availability and need works extremely well if those existing in extreme poverty just were not around – lets say no more than 2 billion left, the jetset crowd and enough needed to service their lifestyle and keep them comfortable.

      Those who are cynical of these new wonder “safe and effective vaccines” being rolled out forcefully to everybody worldwide have noticed that not only do they partially disable our general immune system (gets worse with each booster shot) but that one of the other expected contra indications is reduced fertility….

      That will save the planet.

  3. Mack permalink
    October 21, 2021 4:02 pm

    Business Secretary can’t even use an abacus or is a blatant liar? Ignorant or mendacious? Whichever he is, his calibre is a shocking indictment of the political class currently taking a wrecking ball to our economy and setting the most vulnerable in society up for decades of misery and penury.

    • Chaswarnertoo permalink
      October 22, 2021 7:22 am

      Kwasi also claimed there would be no blackouts this winter. National Grid does not agree…

  4. 1saveenergy permalink
    October 21, 2021 4:27 pm

    A politician telling lies ??

    Never !!!
    … next you’ll be telling us that ( in the hottest year ever ) it it snowed in the village of Braemar, last night.

    BTW: That’s not snow; it’s bits of global warming bunting to welcome the 1,000s of FLOP 26 attendees.

    • tomo permalink
      October 21, 2021 5:55 pm

      hmmm … there’s a hopeful sign …

      only 130 miles to go… and a week to do it…

      The 25,000 (or whatever) attendees to COP26 trudging around in slush would be fun

      • Chaswarnertoo permalink
        October 22, 2021 7:24 am

        One does hope so.

  5. October 21, 2021 4:51 pm

    Everyone and everything associated with this crock relies on no due diligence being done. The cowards pretending to be politicians are all in the pockets of the massively well funded NGO’s and Billionaires who are profiting from the scam. Just look at that maggot Gore.

    People not asking questions from the IPCC and their worthless models through NASA and NOAA( together with the Met Office and the Bureau of Meteorology in Oz “fiddling” data) to the subsidy farming universities inventing data not recording it( Barrier Reef/ Polar Bears).
    Nothing anywhere in any facet of this scam stands up to scrutiny because it cannot therefore the system relies on propaganda on a huge scale together with intimidation and bullying to silence objection. From top to bottom it is all a bare faced lie.

    This is a conspiracy on a massive scale with so many people with non jobs relying on the gravy train. 25,000 people will turn up to celebrate the racket in Scotland alone. You think any of them will have an objective voice? There will be looks of concern, there will be furrowed brows and doctored data for them to arm wave at and hyperventilate thus guaranteeing their worthless jobs for life. Do you think any of them will demand data? Of course not because if there is scrutiny their jobs disappear in a puff of logic!

    We has been had and looking at the fools who follow the likes of the Maid of Stockholm and the utter arrogance and ignorance displayed by in XR and the even more asinine insulate bwittan, maybe we deserve all we get!

    • ThinkingScientist permalink
      October 21, 2021 7:27 pm

      Hanlon’s razor: “never attribute to malice that which is adequately explained by stupidity”.

      Its not a conspiracy on a massive scale, its stupidity and gullibility on a massive scale.

      Fully agree with the point about due diligence. I made the same point to our MP. HMG has outsourced its climate science to the UN and then failed to perform any due diligence or solicit alternate opinions.

      It will end in tears. The issue is how long will it take?

      • October 21, 2021 9:39 pm

        Well there are 25,000 alone coming to Scotland so there is the start of my presentation of the evidence of conspiracy M’lud. It is a conspiracy of money because without money this religion would never have had chance to gestate. Money corrupts and that corruption has spread right into the supposed impregnable word of science and empiricism to the point I would argue that it is threatening the very Enlightenment which created it in the first place, specifically in the West and most specifically in English speaking Western societies. Now, we will both have seen how science works in universities, where bullying and shouting louder than others plays it’s part, but it is still the shear corruption by money during the last 20 years which has completely distorted what research and teaching is being done. In my time geology departments bent to the needs of the oil industry. Now universities are now obsessed with the money they are receiving right across the board to perform junk science and just how much junk there is. And not only junk science but this infection keeps swapping between the humanities and the sciences as new junk themes are invented. Just look at James Cook and the case of Dr Peter Ridd and look what they do to protect that income using tax payer money to silence an individual.

        Then we come to the useful idiot agitators (history is full of them) and those simple believers, the hangers on, like born again Christians who are clueless but feel empowered with the slogans they can now use like red cards to rail against any “non-believer” they come across to demonstrate their piety.

      • October 21, 2021 10:00 pm

        I’m a Conservative evangelical Christian, but also an inherently sceptical engineer. My Christian concern for my fellow human beings is to try and protect them from the huge harms they are being subjected to by evidenceless climate and covid policy. As an engineer, I demand evidence of working & beneficial reality, but don’t see any in either the climate or covid rhetoric, just life-damaging imposition of belief.

      • Tim Spence permalink
        October 21, 2021 9:41 pm

        never attribute to malice that which is adequately explained by stupidity

        …. is itself the essence of stupidity, really, people have to disabuse themselves of this idea.

        What doesn’t kill you makes you stronger … or leaves you in a coma, or paraplegic or worse ….

        When you’ve considered all the evidence and all that remains … (another blinder) no, check the evidence again

      • 1saveenergy permalink
        October 22, 2021 12:25 am

        @ ilma630
        “As an engineer, I demand evidence of working & beneficial reality”

        yet you believe in a god !! 🙄

        “concern for my fellow human beings is to try and protect them from the huge harms they are being subjected to by evidenceless climate and covid policy.”

        but that certainly doesn’t follow most of scriptural teachings.
        You sound more like a humanist to me, well done.

      • Ilma630 permalink
        October 22, 2021 9:18 am

        “but that certainly doesn’t follow most of scriptural teachings”, such as?

    • Phoenix44 permalink
      October 22, 2021 9:58 am

      There are “conspiracies” – I think the Climategate emails justify that title and the extremist groups are too – and without an overriding plan, they have created over the last 20 years a web of lies, deceit and half-truths combined with threats and unpleasant pressures that now dominate the media, academia, quangos and government. It’s now impossible to get a senior job in any of those areas without being a disciple and in many businesses being a sceptic is career-limiting.

      Why it has been successful is clear. Climate change allows a large array of people to unite and push their agendas – the extremist Greens to deindustrialise, the Left to destroy capitalism, the bossy to tell us what to do, the Messianic politicians to save the world, the smug but not so clever to look down on non-believers. It is a coalition of the prejudiced, dim and dangerous.

      • Gerry, England permalink
        October 22, 2021 10:46 am

        You missed out that some people are making a lot of money from the scam, and there is now something like a $2 trillion global warming ‘industry’.

  6. Tinny permalink
    October 21, 2021 4:55 pm

    Meanwhile, AEP in the Telegraph Business section today is telling us that Nut Zero will not only cost us nothing, we’ll actually gain from it.

    Time the man put his money where his mouth is.

    • Mack permalink
      October 21, 2021 6:01 pm

      Em, has AEP signed up to Mr Blofeld’s great reset strategy by any chance? “You’ll own nothing and you’ll be happy…..(or else!)

    • Phil O'Sophical permalink
      October 21, 2021 6:06 pm

      Some might think that his money, like a lot of others’, is in a secret bank account to be opened in 2030…. on condition they keep pushing what they must know is nonsense.

    • Phoenix44 permalink
      October 21, 2021 6:22 pm

      Government spending £1 trillion on what it thinks we should have is not the same value economically as having us spend £1 trillion on what we want. But our Tory government has apparently completely forgotten this.

  7. Phoenix44 permalink
    October 21, 2021 6:20 pm

    Have they seriously convinced themselves that the economy as a whole isn’t going to suffer? This is a fantasy akin to those of the USSR, judging the value of an economy by its cost, not what people are willing to pay (actual value). It is valuing tractors that lack wheels and nobody wants at £10,000 because they cost £10,000 to produce. And yes, everybody in the USSR was employed but again as the USSR showed, many didn’t actually have jobs.

  8. Harry Passfield permalink
    October 21, 2021 6:50 pm

    What is needed is for an MP to put down a Question to the SoS as described above in the question asked by Ferrari. He will be unable to lie to the HoC without censure (or more)..

  9. October 21, 2021 6:53 pm

    Obviously he was briefed by Gummer!!!

  10. October 21, 2021 10:38 pm

    Business Secretary misleads on Net Zero costs

    All part of the job. Are his political opponents going to call him out on it? No, far from it, unless he fails to mislead which could make their own even wilder climate policies look bad.

  11. Mack permalink
    October 21, 2021 10:43 pm

    Alas, TS, you cannot ascribe politicians’ mad rush to the Year Zero as mere ‘stupidity’. 5 mins worth of research on the internet would provide even the dumbest of inquisitive MPs with enough difficult questions as to stupefy any of the climate pharisees that dominate the media. Regardless of any personal skepticism that they may have about the current narrative, very few will raise their head above the parapet and call it out. Self preservation is a mightily powerful force. Just ask all those scientists, who know that anthropogenic global warming theory is lame, but who blindly go with the flow in order to keep a roof over their heads.

    • philredding724642 permalink
      October 22, 2021 2:18 am

      Agreed whole headedly.

    • ThinkingScientist permalink
      October 22, 2021 9:01 am

      The problem for politicians is that for almost all of them they lack any of the necessary discriminatory faculties to understand and make rational decisions where science is concerned. They are unable to call BS when they see it. Properly trained engineers and scientists who are in advisory capacities eg peer review prior to major investment in a corporate setting (for me, technical advisory and review team for sanctioning the drilling of oil wells), they know BS when they see it, they call it out because its their job to be skeptical. And the people presenting the case generally know this – they are not going even going to try to BS. So you have a win-win with peer review working properly.

      But governments only tend to listen to those following the agenda they set. Once the agenda is set, they only ask the opinion of those who agree with the direction of policy – the climate change committee being a good example. That’s why the GWPF is so important – they are the “other voice”. They provide very sound ammunition to persuade MPs to change course.

      The further problem, and I have mentioned this here before, is that almost the entire HoC voted for the Climate Change Act 2008, only 5 people didn’t. They were sold a pup, but even if they realise that now, they are caught up in the politics of it. They cannot easily get out. They are in a hole and the only way out is to stop digging. But if they do they will be called deniers, they would have to admit they were wrong, they will lose face. There is no politically acceptable way to get out of this mess currently – unless some astounding new evidence that can’t be refuted is found (which is unlikely, geoscience is messy and contradictory).

      I agree with comments about money and corruption (in the general sense of “money corrupts”, not the specific sense of deliberate fraud) , but its not a vast conspiracy. I could give technical examples in the well educated oil industry where the erroneous belief in some model output exactly mirrors that of climate models. I have spent 25 years pointing out the assumptions are wrong and the conclusions drawn from these models are of no value, but well educated technical people still request, pay for and use the results of those studies in spite of the obvious technical defect. Some people just can’t see it and they still want to believe the sales pitch of companies offering those technical services. If well trained scientists and engineers with PhDs fall into that trap with no malice or conspiracy involved, its easy to see how MPs, Greenies and the BBC and Guardian staffers do. Hence Hanlon’s Razor.

      This is why Feynman’s famous quotes are so apt and why Feynman was such a good scientist and physicist. Feynman was the man, if only he were alive now during the climate madness. Sadly he died in 1988, the year Hansen made his famous declaration to Congress – how ironic is that?.

      The list of appropriate Feynman quotes is almost endless:

      “The first principle is that you must not fool yourself and you are the easiest person to fool.”

      “It doesn’t matter how beautiful your theory is, it doesn’t matter how smart you are. If it doesn’t agree with experiment, it’s wrong.”

      “I believe that a scientist looking at nonscientific problems is just as dumb as the next guy.”

      “There is a computer disease that anybody who works with computers knows about. It’s a very serious disease and it interferes completely with the work. The trouble with computers is that you ‘play’ with them!”

      “I don’t know what’s the matter with people: they don’t learn by understanding; they learn by some other way – by rote, or something. Their knowledge is so fragile!”

      “Reality must take precedence over public relations, for nature cannot be fooled.”

      “Science is the belief in the ignorance of experts.”

      • ThinkingScientist permalink
        October 22, 2021 10:16 am

        I’ll give you a couple of good anecdotes concerning science and understanding.

        I was once employed by an Exploration Manager in an oil company as a technical expert in geostatistics. Every year at my appraisal my boss would tell me how good I was at geostatistics and give me maximum appraisal marking in this technical area.

        I would reply by asking him how he knew that was true. He would laugh and miss the point. My point was that unless you are also a technical expert in the same field you can’t really tell if someone is an expert. And if you are both technical experts in the same field you will find much to agree on, but you will disagree on minor details. To an outsider they are unable to tell if those disagreements on detail actually matter or not in decision making – you see this a lot in academia (where much of government scientific advice is sourced from).

        Going further back to my university days, another anecdote. I had an excellent tutor who was a Geochemist. At one tutorial in my second year he was discussing the main course text book. He said he had read through all the chapters and thought it was excellent. He then said that there were some minor errors and weaknesses in the sections dealing with geochemistry but the other chapters on different topics were really excellent.

        He then paused, looked at us and said that he would expect that if we asked the other lecturers they would say the Geochemistry section was excellent, but there were minor errors and weaknesses in the chapters dealing with their particular specialist areas. The point was very well made – we are only really competent to critique in detail in our areas of expertise. However, climate is a research area where there is no real “climate scientist” – that’s a device to exclude outsiders who might critique using appropriate technical expertise that can be transferred. (There is a difference between specialist knowledge and general, transferable expertise like mathematics, forward/inverse modelling, statistics etc).

        In May this year I presented a (sceptic) climate paper at the Geol. Soc. London Climate Change mini-conference. Listening to the other papers it struck me how many of these clever, PhD qualified geologists are now using computer climate models to reach geological conclusions to explain past geological events. The problem is they lack the discriminatory capacity to consider the models they are using are unvalidated and likely completely wrong physics. They can’t tell and of course they are academics with very sparse paleo data, so any explanation can be given for a past event and nothing is likely to categorically prove it right or wrong. Not at all like drilling a well in the oil industry and the result is a dry hole – ground truth is a hard lesson that really tests your analytical skills and knowledge.

        Me, I’m a geophysicist so my entire training and career is based on the use of forward and inverse modelling. So I have to understand the model process inside out. So I tend not to fall into the trap, whereas the geologists do.

      • ThinkingScientist permalink
        October 22, 2021 10:29 am

        I know I am going on, but I wanted to link Feynman’s quote to where the geologists using climate models to explain the past are going wrong:

        “It doesn’t matter how beautiful your theory is, it doesn’t matter how smart you are. If it doesn’t agree with experiment, it’s wrong.”

        The fundamental problem in science now is that geologists think that running the computer model of the climate is actually running an experiment.

        That’s become generally true of a lot of climate science. Running a computer model is NOT an experiment. But if you think it is, it acts as the proof of your initial assumptions. Perfectly circular reasoning.

        That’s not a conspiracy, its just stupidity.

      • Luc Ozade permalink
        October 23, 2021 1:39 pm

        TS:
        Thank you for all your exceptionally interesting comments. I always enjoy reading your input.

  12. Ian PRSY permalink
    October 21, 2021 11:39 pm

    Meanwhile, a green bond issue is TWELVE times oversubscribed:

    https://uk.finance.yahoo.com/news/uk-second-green-gilt-net-zero-cop-26-143351493.html

    No wonder big business is so enthusiastic about saving the planet! Why can’t NSI issue saver bonds so that the people who are paying have a chance of a reward?

  13. Chilli permalink
    October 22, 2021 1:25 am

    Kwarteng’s general knowledge has certainly atrophied since his University Challenge days. Or perhaps he knows he’s talking BS but hopes the interviewer and audience are ignorant enough to believe him.

  14. cookers52 permalink
    October 22, 2021 6:17 am

    The planet doesn’t care.
    My house is built on a flood plain, the flood plain is flat low lying land an ancient river terrace, these flat river terraces are covered with housing all across the country. Most people choose to ignore this or are not even aware of living on a flood plain.
    Net zero makes no difference at all to my risk of flooding, and as there is very little anyone can do, nothing is done.

    • MrGrimNasty permalink
      October 22, 2021 9:38 am

      I related a situation a while ago where an unnecessary brand new sea wall based on crazy fraudulent Environmental Agency predicted sea level rise estimates had just had a hole knocked in it to install a pumping station to drain a new housing development on the flood plain behind. Of course sooner or later it will get blocked or have a power failure just when it is needed! It is a mad mad world these days.

  15. Wiggers permalink
    October 22, 2021 11:08 am

    Every Net Zero policy needs to be challenged with the question, for this cost what will the benefit be in terms of degrees of warming avoided? Only then can we decide which policies have the most cost-effective benefit.

  16. October 28, 2021 1:37 pm

    The greatest number of present day lies is concentrated in the Green movement’s climate operations.

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