We just can’t go on like this. It is now clear that the cost of electricity in this country is out of control. It is way above almost every other developed country, and the war in Iran now means that household bills will rise a further 4 per cent in October.
We are walloping consumers, we are crippling our industry and we are deterring anyone who wants to invest in the UK. And yet here is the thing that really drives me nuts: we are now producing prodigious quantities of clean, green electricity – far more than we need.
How have we managed to pull this one off? How have we Brits managed to defy the basic laws of economics? We are physically capable of producing a superabundance of electricity – but the domestic price keeps going up and up.
The price of electricity is now so extortionately high that consumption has 21 per cent since 2005, as electricity-intensive businesses flee the country. What the hell has gone wrong?
We all know the answer, don’t we? It’s all that Net Zero stuff, now compounded by the eco-lunacy of Ed Miliband. We may be capable of producing phenomenal quantities of wind energy – but that’s no use when we have to pay wind farms in Scotland billions of pounds a year to turn off their turbines on windy days because our grid can’t cope with the extra electrons they are creating.
It’s no use being the Saudi Arabia of wind, if we can’t move that wind-generated electricity cheaply and conveniently to the places that need it. Wind power is all very well, but it turns out that it contains billions upon billions of hidden costs. We are trying to integrate a relatively new power source with creaking and inadequate infrastructure, and it is showing up in our bills.
It turns out that producing electricity is not like making a tin of baked beans. You can’t just keep it in the larder for the moment you need it. If you want to keep the lights on, you need to make sure that your system is supplying pretty much what the country needs, when it needs it – and the trouble is that there are too many cloudy, windless days to rely exclusively on renewables.
That is why the price of electricity is still so vulnerable to spikes in the price of gas (from which we generate electricity), of the kind we saw when Putin attacked Ukraine in 2022 – because we have a national price, and that national price is determined by the cost of the last unit needed to keep the lights on... which is gas.
Wind farm in Clarendon, Texas. In the past 15 years there has been a massive increase in Texan wind and solar power
What the hell has gone wrong? We all know the answer, don’t we? It’s all that Net Zero stuff, now compounded by the eco-lunacy of Ed Miliband, writes Boris Johnson
So how do we get out of this mess?
Well, there is a school of thought that we should never have gone for renewables at all, that Net Zero is a sham, a snare and a delusion.
Never mind the drought, never mind the fires, never mind the horror in Nepal and Tibet – the argument is that Britain alone can’t fix global warming, and we shouldn’t even try.
There are some on the Right of politics who think we should just get back to oil, gas, coal, and frack the bejeezus out of Lincolnshire, whatever the people of Lincolnshire may think.
They say we should give up on wind and solar and make a dash for nuclear. They have half a point – but only half. It is true that Ed Miliband as Energy Secretary was mad to try to decarbonise power generation in this country by 2030.
We should certainly be using every last drop of our own North Sea hydrocarbons. It is criminal that Miliband punished UK industry in Aberdeen while forcing us to import oil and gas from abroad. And we should certainly be building far more nuclear resilience into our energy mix.
In April 2022, the Conservative government set out a vision for 24 gigawatts of nuclear – about a quarter of our needs. Labour should get back to that, and indeed there are signs that they are repenting of their previous asinine Lefty hostility to nukes. But I am afraid that this will take time, patience and vast quantities of political will to cut through the red tape that stops us building anything in Britain.
As for rushing back to gas and other hydrocarbons, yes we should use what we have but we simply don’t have enough in the North Sea, and we make ourselves completely vulnerable once again to the vagaries in the global gas price.
No, the answer is not to scrap wind, solar and other renewables, which now make up about 52 per cent of our electricity production. The answer is to adopt proper Conservative principles and let the price of this amazing new renewable supply be determined by the market.
Look at Texas, the rock-ribbed Trump-voting home of Dallas oilman JR Ewing.
The average Texan probably thinks wind power is for sissies, right? Wrong, wrong, wrong. In the past 15 years there has been a massive increase in Texan wind and solar power, so that together they comprise about 37 per cent of the electricity market.
They have done it without the price spikes we have seen in Britain, without such mad expedients as paying turbines to stop moving. Indeed, electricity prices for consumers remain about half the price in the UK, and as for industry – well, it’s a small fraction, and it depends where you are in Texas; and that is the key point.
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One of the reasons the Texas renewables programme has been so much more successful than ours is that they don’t have some demented Soviet-style Gosplan national price. Like Sweden, and an increasing number of countries around the world, they have local pricing.
That means in west Texas, where they have huge wind farms, they have very, very cheap electricity; and that is how they have been able to attract colossal business investment, not just in data centres but in all kinds of energy-intensive industries.
We should do exactly the same. Imagine the benefits for the people of Scotland, the North East, Wales, the South West – all the areas with prodigious capacity for offshore wind – who would suddenly see a fall in their own bills and a new and powerful incentive for others to invest in their areas: data centres, aluminium smelting, electrolysis – cutting-edge 21st century jobs.
If we allow the electricity market to work properly in this country, we will have a massive natural force for levelling up. But it is crucial to understand that by allowing the price of electricity to fall on the Essex coast, or in Cornwall, or in Scotland, we are causing a zero-sum increase in the cost in London and the South East, where electricity use is highest.
By getting rid of such crazy expenses as the curtailment payments to stop the turbines when it’s too windy – set to rise to £8billion a year by 2030 – a real market should see falls in electricity prices across the country. It’s just that some will have bigger falls than others.
So, I say to my fellow Conservatives – get real. Get with the hot dang Right-wingers of Texas. Get the best out of Britain’s amazing potential for offshore wind power. Get rid of this crazy one-size-fits-all pricing system.
Get rid of socialist equality of misery and let the market work.