ECLIPSED by the national grief over the Queen’s death at the end of last week, the most important paper to date on how to fix the energy cost crisis was published by Net Zero Watch.
It sets out the urgent steps that the Prime Minister must take to reduce the astronomical cost of her borrowing plans to limit consumer energy bills (estimated at between £130-170billion) if the country is not to face potentially disastrous increases in public debt; a process which will further imbalance the the public and private sector arms of the economy – with ever more printed money flowing to the owners of capital where it stagnates, creating a need for ever more to be pumped in at the bottom.
Net Zero Watch has published a concise statement of the measures that Liz Truss must take to bring energy prices down in the short term, ones that will prevent further economic meltdown. The accompanying press release to the new paper describes the policies recommended as ‘unapologetically radical’. In fact they are not radical but common sense. The recommendations they set out are unapologetically sane and sensible. The current crisis is the result of two decades of deeply misconceived, extraordinarily risky, hubristic and ill-informed energy policy. Rectifying these errors, they say, will take many years. Matters can begin to improve but only if these sound recommendations are applied immediately. Any attempt to maintain Net Zero ‘business as usual’ will prolong the agony and result in still deeper problems. Amongst the measures Net Zero Watch believes to be mandatory are:
1. Suspension of the UK Emissions Trading Scheme.
2. Restriction of trade over the gas and electricity interconnectors to the EU to emergency aid and system balancing only.
3. Reduction of the value of the Renewable Obligation certificate to zero (subsidy is unnecessary at current high market prices).
Together with other suspensions, such as subsidies to EVs and heat pumps, these policy changes could deliver savings in the region of £1,500 per household in the coming winter, and a further £1,200 in the winter of 2023/24. This would reduce the cost of the Government’s plans by up to £70billion.
The Government should also pay for replacement of the gas turbines in power stations to improve the efficiency of the electricity industry, give the green light to shale gas drilling, and enable the securing of longer-term gas supply contracts by publicly recognising the centrality of natural gas to the energy system until new nuclear can diversify supply.
The plan is authored by energy economist Professor Gordon Hughes and Net Zero Watch’s deputy director Andrew Montford.
Professor Hughes believes that ‘the time for conventional wisdom is over’, that radical measures are required to avoid disaster and that we must get energy prices down ‘rather than pushing the costs on to future generations’. It is astonishing that there remain Conservative Party climate zealots who do not understand this. As Andrew Montford has said, unless the new Prime Minister bites the bullet and undertakes the reforms described in the paper the crisis will rapidly become a catastrophe. The situation is now desperate. Radical action is mandatory.
Gordon Hughes and Andrew Montford’s must-read paper can be found here: