Opposition to decarbonisation is gaining momentum, and it’s starting to feel like a new consensus is emerging, writes Andrew Montford
The Conservative Party’s pledge to repeal the Climate Change Act signals the end of a decade-long agreement in Westminster to prioritise decarbonisation. For years, cracks have been forming in this consensus, and with the cost of living crisis now the public’s top concern, rising electricity prices are under unprecedented scrutiny. While many don’t yet connect these increases to Net Zero policies, awareness is growing – and fast.
As the official opposition, the Conservatives are in a position to challenge the Net Zero agenda like never before. Reform UK, meanwhile, is adding pressure from the backbenches, ensuring tough debates for Sir Keir Starmer and Energy Secretary Ed Miliband. The government is now under fierce pressure from outside Parliament too, with trade unions furious over job losses in manufacturing and the North Sea oil and gas sector.
Opposition to decarbonisation is gaining momentum, and it’s starting to feel like a new consensus is emerging. Labour’s commitment to Net Zero risks looking out of touch with everyday concerns.
Their position is not going to get any easier. Electricity prices are set to climb further as new wind farms come online in the coming years. These projects will not only increase subsidies paid by consumers but also drive up ‘system costs’ – expenses like paying wind farms to switch off or keeping gas plants running as backups. Claims of ‘cheap renewables’ and attempts to blame ‘volatile gas prices’ will look foolish as electricity bills keep rising.
Labour’s difficulties will be mostly self-inflicted. If Ed Miliband’s Clean Power 2030 plan, which aims to fully decarbonise the grid, secures investor support, new wind farms will flood the system, spiking costs and pushing electricity prices to levels not seen since the 2022 energy crisis. Once these projects are built, getting bills down again will be extremely challenging.
But reversal isn’t impossible. Reform UK has warned investors against participating in the next renewables subsidy auction (AR7), with Nigel Farage hinting at financial “haircuts” for those who do. With public opinion likely to back such moves, Parliament may well allow a future government to follow through. Whether this means cutting subsidies or shutting down renewable projects entirely remains unclear.
Both Reform and the Conservatives are starting to grapple with how to lower electricity prices. Cancelling subsidies alone won’t solve the problem. System costs stem more from the presence of highly inefficient renewables on the grid than the subsidies themselves. If the economy worsens by the next election, ministers might need to consider closing existing wind farms – a hard but legally possible move, given parliament’s sovereign authority.
Investors should therefore take note. Putting money into AR7 will be immensely risky, and steering clear might be the wiser choice. Moreover, with the economy worsening, and with public and political tides turning, even those with completed windfarms in their portfolios should be more than a little nervous.
Andrew Montford is the director of Net Zero Watch