NIC Put a Cost of £1.3 Trillion on Net Zero
By Paul Homewood
https://nic.org.uk/studies-reports/national-infrastructure-assessment/second-nia/#tab-summary
Bit by bit, we are learning the truly horrifying cost of Net Zero.
Over the years of course successive governments as well as the Committee on Climate Change have tried to pull the wool over our eyes, avoiding specifics and instead talking in generalities about green jobs and economic growth.
The first chink appeared in 2019, when Philip Hammond’s Treasury team put an estimate of £1.2 trillion on it, a figure which the government at the time did its best to hide and discredit.
Since then various independent estimates have suggested the real costs might be even greater.
The National Infrastructure Commission (NIC) has just published its Second National Infrastructure Assessment, which has looked in detail about the projected costs, and it backs up what the Treasury feared four years ago.
These are the key takeaways:
- Up to £35 billion per year between 2025 and 2050 of investment in renewable generation capacity and flexible sources of generation, electricity grids, and hydrogen and carbon capture and storage networks
- £2.5 billion per year between 2024 and 2050 to decarbonise public sector buildings by deploying heat pumps, heat networks and energy efficiency
- £12 billion per year to cover the extra costs of replacing gas boilers with heat pumps, most of which will be financed by the government rather than homeowners.
- 300,000 EV chargers – no cost is given, but it is likely to be in the region of £30 billion.
- £74 billion for decommissioning the gas network
Add that lot up, and we are looking at over £1.3 trillion. And all of these investments are superfluous. We already have plenty of gas generating capacity, most of which should still be in working order in 2040. We also have a working grid that has no need of extra storage, and is capable of handling existing demands. And of course, we also have efficient heating systems and motor vehicles. All of this extra expenditure is therefore of no benefit.
But that is only the start. The NIC, for instance, assume that EVs achieve price parity with ICE cars by 2030. They currently cost at least £10K more, and there is no evidence that this will change significantly in the foreseeable future.
If we assume this price difference lasts until 2040, the extra cost would amount to £230 billion in the 2030s alone.
By the nature of the beast, a lot of these costs are front loaded in the next decade or so. So although cost pressures might ease after 2040, costs will be particularly heavy until then. Hence the NIC’s suggestion that the government should provide zero interest loans for household heat pumps, the idea being that homeowners can pay them off in instalments, in the hope they don’t notice them!
But providing interest free finance is merely one more hidden cost that the government must bear. Money does not grow on trees, so the government will find yet more debt servicing costs added to an already unsustainable public deficit. Worse still, this money that they will need to borrow will drain resources away from more productive investments.
But there is one more glaring underestimate. The NIC claim that annual household energy bills will be £1000 lower eventually, thanks to “wonderfully cheap renewables”. But the report’s small print tells us that all of their energy costings are based on the government’s latest Electricity Generation Costs report, published in August this year.
And lo and behold, this tells us that the levelised cost of offshore wind is £44/MWh at 2021 prices. The recent CfD auction of course failed to get any offshore wind bids at a higher price than that. And studies of the real costs of construction indicate that the true cost is double this assumed cost.
https://www.gov.uk/government/publications/electricity-generation-costs-2023
Worse still, the report also states that the cost of CCGT generation is only £54/MWh, when the fictitious cost of carbon is taken out.
In short, our electricity bills will increase and not decline. Not only that, but a doubling of offshore wind costs will add hundreds of billions more to that investment bill.
There is no recognition either in the NIC report of the fact that heat pump running costs are higher than a gas boiler.
So when we add all of these extra costs in, as well as the cost of interest and the tendency for official estimates to be too low, we could easily be looking at a total bill of £2 trillion and more.
But even the £1.3 trillion works out at £48 billion a year, and that’s £1700 for every household in the country every year.
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NOT A LOT OF PEOPLE KNOW THAT 
But it’s even worse than this. No country aiming for net zero has a plan that will actually deliver net zero. They all rely on technology that doesn’t exist, and may never exist.
If by some miracle the technology did exist, it won’t make an iota of difference to whatever Mother Nature decides to do,
Of course. But isn’t it odd that those who believe in net zero don’t have a plan that will achieve it?
“No country aiming for net zero has a plan that will actually deliver net zero.”
Indeed. British actions like heat pumps and EVs could REDUCE use of fossil fuels over current levels, but they DON’T get you to Net Zero, just closer. So in 2050, the EVs and heat pumps will have to go, too.
As you note so well, the tragedy is that no one will benefit from this massive tax load. In addition it will not “Save the world” or make any measurable difference to CO2. Madness, but at least the signs are growing of resistance to this.
India, China and other developing countries are placing growth first. Even if the developed countries do stop using coal, oil and gas it won’t make much of a difference with 90% of the world still using them. The cost is much too high for working people to pay. The wealthy are the only ones that have trillions they can spend.
This aspect – the cost of net zero – has been an unforgiveable con trick by our government. Not so long ago Clare Perry (and there were probably others) was saying that it was essentially free and would probably reduce our bills. When I raised the issue with my MP I received a reply clearly scripted by some gormless wonk in whichever Ministry was responsible then which more or less said ‘..don’t worry just leave it to us!’
” Leave it to us” -where does one start to list the complacency of such an approach to infrastructure funding , private and public. I suggest with HS2 then Crossrail then …… ( add yours here). The fact is that the govt. seems incapable of dependable estimating nor is subject to the disciplines attached to limited private funds , with rare exceptions.
Think back to a private project that was successful – Heathrow Terminal 5. Delivered on time and on budget….and then BAA sold out in a debt laden takeover by the Spanish.
Thanks Gezza1298. And there was the shambles of the transfer of air traffic control to Swanwick. Some author(s) have already attempted to explain these failures by saying that the problem is to do with the whole approach by NGO’s etc when spending others’ money. Berlin’s (new) Airport and the Sydney Opera House overruns in cost and delivery demonstrated the same fallibility.
It has been interesting to hear that whistleblowers were saying that the top people at H2S were driving up costs to enrich presumably themselves and the contractors. Yes, when BAA were spending their own money they got it right. Perhaps future projects are given a set budget and they have to deliver or face public humiliation. The Berlin Airport was an amazing failure that is an indicator of the scale of the collapse of the Germany that people once held up in admiration.
It may as well be 200,000 Trillion – there is no upper limit to fantasy policy
And you aren’t going to have the money, anyway.
Net Zero is economic suicide. Cost isn’t a relevant term when you have no economy.
IT seems to me that 650 MPs cannot all agree to this nonsense therefore they must be in fear and being controlled by some other power.
I suspect that most MPs are either too thick or too lazy (or both) to think these matters through and, instead, just parrot what the eco zeolots tell them
More like £2 trillion for the grid and at least £3 trillion for storage, then £3 trillion for all the wind turbines nobody wants to build. About £400,000 per family.
Start hoarding peat. And dung.
He seems to have forgotten entirely about the cost of insulating all our buildings. Most of his other estimates are hopelessly low. National Grid have already admitted to a need to spend over £200bn by 2035. The Civitas estimate of £4.5 trillion is starting to be in the right ballpark. It’s a shame it was marred by a single “h” when it gave the cost of wind as £1.3m/MW(h) – duly seized on by the usual suspects. Wind capacity at £1.3m/MW would be very cheap compared with today’s offshore wind farms that are coming in at around £2.75m/MW.