Major shake-up of UK energy system could ‘lower bills for good’, government says
Plans to “green” the UK’s power system will protect consumers from future energy crises and has the potential to “bring down bills for good”, the government has said.
Achieving clean electricity by 2030 was a key election promise for the Labour party, and reiterated by Keir Starmer last week as he outlined government ‘milestones’.
To reach the target, ministers are working on a radical shake-up of UK energy and clunky planning systems, including at least doubling clean power sources.
It is hoped the plans will eventually lower bills by reducing the cost of electricity.
But the government could not say when electricity bills would fall, and it faces the risk that any benefits won’t be felt in people’s pockets until after the next general election.
It also accepted that the massive amount of new infrastructure needed could bring difficult trade-offs, including impacts on communities and nature.
Energy secretary Ed Miliband said the government is “embarking on the most ambitious reforms to our energy system in generations”.
He added: “A new era of clean electricity for our country offers a positive vision of Britain’s future with energy security, lower bills, good jobs and climate action.”
What are the changes?
The government is aiming to get at least 95% of power from clean sources – predominantly wind, solar and nuclear – by 2030.
The target is five years earlier than the Tories’ plan for clean power by 2035.
To get there, the Clean Power Plan published today outlines a raft of far-reaching measures, including:
- at least doubling current offshore wind, onshore wind and solar power capacity
- fixing the “dysfunctional” system stopping clean power projects from connecting to the national grid
- speeding up planning decisions
- reviewing the judicial review system that can slow down developments
- creating benefits for communities living near new developments
- building 80 new infrastructure projects.
Analysis on clean power plan:
Labour thinks colossal gamble will be worth it
How will the changes impact bills?
Professor Rob Gross, who advised the government on the plan, said the plans should stabilise prices and protect consumers from future energy crises.
That is because clean electricity prices are fixed over several years, whereas international gas prices are volatile.
“If we get it right”, electricity prices will no longer be “driven up and down because a war has broken out somewhere else in the world”, said Prof Gross.
Ed Matthew from thinktank E3G, called it a “herculean mission” that could help lower electricity bills in the next five years, but only with a “major rewiring of the UK’s policy framework”.
He said bringing the deadline forward could push up some short term costs by stretching supply chains or pushing up demand.
Shadow energy secretary Claire Coutinho said the “rush to decarbonise the electricity system by 2030 will push up electricity prices and cause more hardship for people across Britain”.
What is missing from the plan?
Analysts also warned that “greening” the electricity network was only one part of the puzzle, as the government seeks to lower all energy costs and hit its climate targets.
Jess Ralston from energy think-tank ECIU urged ministers to speed up the installation of electric heat pumps to replace gas boilers, to “avoid being on the hook for expensive gas in future”.
The UK Energy Research Council said in a separate report this week that the 2030 target is “only the first step towards a more expansive vision for sustainable energy” in the UK.
If the government wants to reach its broader climate target of cutting emissions by 81% by 2035 – as announced at the recent COP29 climate summit in Azerbaijan – it must also clean up other sectors like heavy industry and transport, it said.