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Telegraph
5 days ago
- Business
- Telegraph
Miliband's net zero crusade won't end until we are all poorer
When it comes to the real cost of renewables, the cat is well and truly out the bag. Ed Miliband can carp on all he likes about how his precious net zero revolution is going to magically lead us down the merry path to cheaper energy bills, but he can't change facts – and his green dreams continue to collide with reality in the most damning fashion. The latest blow to his clean energy fantasy comes once again in the form of wildly unaffordable offshore wind power after Miliband unveiled the prices the Government is willing to pay for yet more offshore wind farms to be built in UK waters. When Claire Coutinho, the shadow energy secretary, describes them as 'eye-watering', she isn't exaggerating. International developers are being wooed with a maximum guaranteed price of up to £113 per megawatt hour (MWh) for the power they generate from the farms – far above the wholesale price of power, which last year averaged about £72. The price has been confirmed ahead of the latest round of subsidy awards for developers. You might think Miliband had learnt from past debacles, such as 2023's auction, which was such a catastrophic failure that there wasn't a single bid despite seven contracts to build new farms being put forward. True, it was late 2023 when Labour was in opposition, but still. That was such a shambles it was obvious that the economics of offshore wind were evaporating faster than it takes a giant spinning metal blade to turn a passing gull into mincemeat and feathers. The guaranteed prices on offer were so low that Tom Glover, chairman of energy company RWE's UK arm, warned that no more offshore wind farms would be built unless the Government increased the guaranteed long-term prices by as much as 70pc. By Glover's calculations that would have meant promising developers between £65 and £75 per MWh for the power generated from wind farms, as opposed to the £44 that was actually on the table. And yet look where we are today, less than two years later. The strike price for offshore wind in the subsequent round actually turned out to be even higher than Glover's demands, at £82. Now Miliband is willing to pay up to £113 in the upcoming round, a 38pc leap from that and a whopping 57pc more than the wholesale price of electricity last year. He has clearly allowed the disastrous cancellation of several major wind projects to spook him into being even more generous this time around. The biggest of these was the vast Hornsea 4 wind farm, which was abandoned earlier this year. The reason? Because it would never be profitable, Danish developer Ørsted said a mere nine months after it was awarded the contract. It was even willing to fork out €500m (£423m) in 'break-away' costs to relinquish itself from the burden.
New Statesman
02-07-2025
- Business
- New Statesman
Let's choose a homegrown energy future
Image: OEUK The UK offshore energy industry is vital to our national interests. It powers our homes, fuels our economy, supports skilled jobs across the country, and helps to drive down emissions. As the UK moves towards a lower-carbon future, this sector will remain essential in meeting the country's energy needs while building the infrastructure of tomorrow. From offshore oil and gas to wind, hydrogen and carbon capture, the sector is already delivering the mix of energy sources needed to keep the lights on, grow the economy and progress towards net zero. But it needs a clear, stable energy strategy from government to continue investing, protect jobs, and ensure UK energy security. This is not a theoretical debate, but a practical one. The choices made today will affect energy bills, jobs, investment and emissions for decades. Currently, around 75 per cent of the UK's energy comes from oil and gas. These fuels are essential—not just for heating and transport—but for making products like steel, chemicals and cement. While demand will fall over time, it won't disappear overnight. Even in the most ambitious net zero pathway, the UK will need oil and gas for decades. The Climate Change Committee estimates we'll need 13 to 15 billion barrels by 2050, yet we're on track to meet less than a third of that from domestic resources. With the right policy environment, we could meet up to half of that demand, supporting energy security, protecting jobs and delivering over £150 billion in economic value. Every barrel we produce at home is one we don't import. Relying on imports means exporting jobs, raising emissions, and losing control of our energy future. It also increases vulnerability to global shocks. Subscribe to The New Statesman today from only £8.99 per month Subscribe The offshore sector supports over 200,000 UK jobs, including 90,000 in Scotland, and contributes £25 billion annually. It's already delivering major low-carbon projects and is one of the UK's biggest infrastructure investors. But these jobs are at risk. A report from Robert Gordon University warned tens of thousands could be lost by 2030 without policy support. The solution lies in expanding renewables while avoiding an accelerated decline in oil and gas production. We're already seeing warning signs. In May, Harbour Energy announced 250 job losses, and Ørsted paused the Hornsea 4 wind project—both citing rising costs and investment challenges. We are not making the most of our natural resources. We need pragmatism to unlock them responsibly. As the UK seeks more energy investment, delays and job losses highlight the urgent need for stable policy. The UK has set ambitious climate targets, and the industry shares that ambition. Producers have cut production emissions by 20 per cent since 2018 and aim to halve them by 2030, reaching net zero by 2050. The same infrastructure and expertise that powers oil and gas today is enabling new technologies like carbon capture, hydrogen, and floating wind. The Green Volt project off Peterhead illustrates this. Floating wind turbines will power oil and gas platforms and provide clean electricity to homes—using supply chains built through decades of experience. The UK has the natural advantages to lead in offshore energy: the second-largest offshore wind capacity globally, geological potential for carbon storage, and remaining oil and gas reserves. But without the right investment climate, these opportunities may go elsewhere. In Q3 2024, the UK imported nearly 40 per cent of its energy. Meanwhile, prices remain higher than in many European countries. We need a balanced, pragmatic policy. A successful North Sea requires practical solutions that protect jobs, attract investment, and maintain control over our energy mix. The offshore sector is investing in the future but needs stability and confidence from government: clear licensing, fair taxation, and a supportive investment environment. This is a crucial moment. The decisions we make now will shape our energy future, job market, and climate leadership. Let's choose a homegrown energy future. Related
Scotsman
25-06-2025
- Business
- Scotsman
GB Energy to take Scandinavian inspiration to become power company amid renewable slowdown alarm
Sign up to our Scotsman Rural News - A weekly of the Hay's Way tour of Scotland emailed direct to you. Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... The interim CEO of GB Energy has insisted the flagship UK government project will take inspiration from Scandinavian success stories as it presses ahead with becoming a publicly-owned power company with a 'technology-focus'. The message was delivered at Offshore Energies UK's (OEUK) annual conference in Aberdeen, where delegates heard a warning that the ambition of renewable energy has not ramped up at the scale initially promised, alongside an 'accelerated decline' of the oil and gas sector - blamed on government decisions. Advertisement Hide Ad Advertisement Hide Ad Fears have been raised about the pace of the North Sea scaling up offshore wind (Picture: Andy Buchanan) | AFP via Getty Images Opening the conference, OEUK chief executive, David Whitehouse, warned that the UK was once again 'a country relying on record levels of imported energy, slow economic growth, concerns over jobs'. But he added that 'managed well, the North Sea is an important part of the solution'. Labour urged to back homegrown energy He said that the Labour UK government, which is poised to decide whether to follow through with an election vow to end new licensing, was making 'the choice between a homegrown dividend over a dependency drain'. READ MORE: Rosebank and other North Sea oil and gas fields could be given green light under new guidelines Advertisement Hide Ad Advertisement Hide Ad OEUK has long-warned that the position of Sir Keir Starmer's government risks the UK having to rely on imported fuels to meet energy demand over the coming decades, while Labour ministers have pointed to scientists and the International Energy Agency warning that no new fossil fuel developments should be approved if global efforts to tackle the climate crisis are to remain intact. Mr Whitehouse warned that 'we are not seeing renewable projects being advanced at the speed originally envisaged'. David Whitehouse, chief executive of OEUK | Michal Wachucik He added: 'Last month, Orsted announced that the huge Hornsea 4 project would be discontinued in its current form. The speed of the UK's critical floating wind ambition is under question. 'We are seeing an accelerated decline in one industry and slower build out in another. That risks undermining our supply chain companies who invest across the energy sector. That is economically harmful for industrial communities across the UK.' Advertisement Hide Ad Advertisement Hide Ad The interim CEO of GB Energy, the public company set up by the Labour UK government to be headquartered in Aberdeen, Dan McGrail, highlighted 'a number of positive announcements over the last few weeks' and stressed that the 'mainstreaming of energy is a really important development over the last few years'. Dan McGrail, interim CEO of GB Energy | Michal Wachucik But he warned: 'At the same time, we've seen a steady drumbeat of job losses, not isolated to the oil and gas industry but to other industries in the energy sector.' Mc McGrail, who is also the CEO of RenewableUK, insisted that 'the green economy is growing fast'. He said: 'In the UK we are excellent at innovation and we are seeing that in the content of offshore wind. Sometimes we struggle with the alignment of the political and industrial elements to create the real long-term growth and mass commercialisation. That leads to jobs in manufacturing that go on to lead to further long-term employment. Advertisement Hide Ad Advertisement Hide Ad GB Energy determined to mirror Scandi success 'Recent developments in the world have slowed the progress of that industry and have raised questions about some of the projects. There is a legitimate role for us as GB Energy to step into these places and use our role as the activist investor to stimulate that long-term economic vision and to stimulate confidence within the development community.' Amid criticism that GB Energy will simply be used to structure investment, Mr McGrail said he was adamant that 'our ambition is to be an energy company', adding that 'we need to have technology-focus at our core'. Mr McGrail pointed across the North Sea to successful state-owned companies in Norway, Sweden, Denmark and France as a measure of what could be achieved. Advertisement Hide Ad Advertisement Hide Ad He said: 'We need to look at some of the great examples of European state-owned energy companies - if you take Vattenfall or Statkraft in hydro, if you take Orsted it's offshore wind or EDF it's nuclear. 'We need to build a technology strategy - which isn't just about one technology, it's about a combination of technologies that meet that test of do we have high ambition for this country and our supply chains and do we have a need to step in with strong signalling from the public sector.' Mr McGrail said that alongside floating offshore wind, 'there are additional areas where we need to add to that portfolio' in the energy mix. Advertisement Hide Ad Advertisement Hide Ad He added: 'Over the coming weeks and months, we are going to be working and developing our first long-term strategic plan. Our intention is to develop that strategic plan collaboratively in a structured engagement. 'We want to work with partners, with industry at a national level, but also at a regional level - particularly with the Aberdeen business community, to make sure that the strategy we develop is as complimentary and as intertwined into the regional strategy of our home city. That is going to be absolutely key. Workers 'caught in crossfire' 'We do have an opportunity here to build a lasting British institution. We have an opportunity to reindustrialise large areas of the UK at the hands of the energy transition bringing jobs, growth and prosperity. And we have an opportunity to deliver change to our energy system that will make us more secure, more independent and give everyone a stake in the benefits of state-owned energy.' Advertisement Hide Ad Advertisement Hide Ad Politicians have been blamed for the decline of the North Sea oil and gas sector Chris Cox, CEO of North Sea oil and gas giant, Serica Energy, told delegates that he found it 'deeply frustrating' that workers' futures 'were being caught in the crossfire of opposing ideologies', adding that 'facts have a tendency to be ignored in the debate'. He added: 'The North Sea is a great success and it has been for a long time - and it's paid a lot of tax and supported a lot of jobs.
Yahoo
23-05-2025
- Business
- Yahoo
Net zero less likely to bring down energy bills, warns auditor
Net zero is less likely to bring down energy bills in the near future, one of Britain's auditing giants has warned, amid falling gas prices and the soaring cost of offshore wind. KPMG said it will become 'harder to argue' that the switch to renewables can lower bills in the near-term if such trends continue. Annual household energy bills will fall by 7pc on average from July 1 after Ofgem committed to lowering its price cap to £1,720, largely as a result of the seasonal reduction in the demand for gas, which sent prices lower. It means that the cost of subsidies offered to renewable generators – which are funded by taxes on bills – are becoming an increasing proportion of the cost of household energy. Such levies now account for up to 25pc of energy bills, according to Dieter Helm, professor of energy economics at Oxford University. Simon Virley, the head of energy at KPMG UK, said:'Today's decrease in the energy price cap is the result of falling gas prices and will bring costs back to where they were at the end of last year. This is good news for households still struggling with the cost of living. 'But with upward pressures on the cost of renewables, due to supply chain and other constraints, and if gas prices continue to fall, it will be harder to argue that switching from gas to renewables will help bring energy bills down in the near-term.' Mr Virley's comments reflect the recent turmoil in the renewables industry caused by Danish developer Orsted, which decided to abandon its massive Hornsea 4 wind farm project off the coast of Yorkshire due to rising costs. Orsted won the contract for Hornsea 4 only last year with a guaranteed minimum price of £85 per megawatt hour, which was higher than any other recent award. The renewables sector has been hit hard by inflation, including rising costs for steel and for the ships, cables and other equipment needed to build offshore wind farms. Mr Virley said that in the longer term the shift to renewables still made sense 'to remove our dependence on volatile global fossil fuel markets'. Other analysts say the shift to renewables, and the levies that support them, is costing consumers too much. A separate report, issued last week by Watt-Logic energy consultancy, found that green levies added £18bn to bills last year, a sum that will reach £20bn by 2030. Analyst Kathryn Porter said: 'My analysis indicates that had Britain continued with its legacy gas-based power system in the period since 2006, consumers would have been almost £220bn better off, even taking into account the impact of the gas crisis.' At the centre of such debates is the ever-changing price of natural gas. Its price is set partly by trading at the so-called TTF Hub in the Netherlands – a virtual point in the pipeline network where gas is bought and sold. In 2021, TTF prices – the benchmark for Europe – were hovering around €20 (£17). They soared to €340 at the peak of the energy crisis caused by the Ukraine invasion and have since fallen back sharply. Memories of this huge but short-lived rise – and the huge costs it imposed on personal and public finances – have fuelled the continuing political pressure for an accelerated shift to renewables. Over the last year gas prices have hovered between €31 and €58 – much lower than 2022 but not back to 2021 levels. This remains important for power bills because about a third of UK electricity is generated by gas-fired power stations. However power bills contain several other components besides gas costs. Other factors include network costs – covering transmission infrastructure – and green levies. As the amount of renewables on the network has grown so the size of those green levies has increased – both in cost and as a proportion of bills. This trend is set to continue, directly linked to the growing number of wind and solar farms added to the system. Ed Miliband, the Energy Secretary, repeated his calls to replace gas with renewables. He said: 'The fall in energy bills is welcome news for families across the country and will mean that working people keep more of their money in the coming months. 'But the only way we get long-term energy security is through our mission for cheap, clean home-grown power. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Yahoo
23-05-2025
- Business
- Yahoo
Net zero less likely to bring down energy bills, warns auditor
Net zero is less likely to bring down energy bills in the near future, one of Britain's auditing giants has warned, amid falling gas prices and the soaring cost of offshore wind. KPMG said it will become 'harder to argue' that the switch to renewables can lower bills in the near-term if such trends continue. Annual household energy bills will fall by 7pc on average from July 1 after Ofgem committed to lowering its price cap to £1,720, largely as a result of the seasonal reduction in the demand for gas, which sent prices lower. It means that the cost of subsidies offered to renewable generators – which are funded by taxes on bills – are becoming an increasing proportion of the cost of household energy. Such levies now account for up to 25pc of energy bills, according to Dieter Helm, professor of energy economics at Oxford University. Simon Virley, the head of energy at KPMG UK, said:'Today's decrease in the energy price cap is the result of falling gas prices and will bring costs back to where they were at the end of last year. This is good news for households still struggling with the cost of living. 'But with upward pressures on the cost of renewables, due to supply chain and other constraints, and if gas prices continue to fall, it will be harder to argue that switching from gas to renewables will help bring energy bills down in the near-term.' Mr Virley's comments reflect the recent turmoil in the renewables industry caused by Danish developer Orsted, which decided to abandon its massive Hornsea 4 wind farm project off the coast of Yorkshire due to rising costs. Orsted won the contract for Hornsea 4 only last year with a guaranteed minimum price of £85 per megawatt hour, which was higher than any other recent award. The renewables sector has been hit hard by inflation, including rising costs for steel and for the ships, cables and other equipment needed to build offshore wind farms. Mr Virley said that in the longer term the shift to renewables still made sense 'to remove our dependence on volatile global fossil fuel markets'. Other analysts say the shift to renewables, and the levies that support them, is costing consumers too much. A separate report, issued last week by Watt-Logic energy consultancy, found that green levies added £18bn to bills last year, a sum that will reach £20bn by 2030. Analyst Kathryn Porter said: 'My analysis indicates that had Britain continued with its legacy gas-based power system in the period since 2006, consumers would have been almost £220bn better off, even taking into account the impact of the gas crisis.' At the centre of such debates is the ever-changing price of natural gas. Its price is set partly by trading at the so-called TTF Hub in the Netherlands – a virtual point in the pipeline network where gas is bought and sold. In 2021, TTF prices – the benchmark for Europe – were hovering around €20 (£17). They soared to €340 at the peak of the energy crisis caused by the Ukraine invasion and have since fallen back sharply. Memories of this huge but short-lived rise – and the huge costs it imposed on personal and public finances – have fuelled the continuing political pressure for an accelerated shift to renewables. Over the last year gas prices have hovered between €31 and €58 – much lower than 2022 but not back to 2021 levels. This remains important for power bills because about a third of UK electricity is generated by gas-fired power stations. However power bills contain several other components besides gas costs. Other factors include network costs – covering transmission infrastructure – and green levies. As the amount of renewables on the network has grown so the size of those green levies has increased – both in cost and as a proportion of bills. This trend is set to continue, directly linked to the growing number of wind and solar farms added to the system. Ed Miliband, the Energy Secretary, repeated his calls to replace gas with renewables. He said: 'The fall in energy bills is welcome news for families across the country and will mean that working people keep more of their money in the coming months. 'But the only way we get long-term energy security is through our mission for cheap, clean home-grown power. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
