The green elites are living in dreamland

Their ‘green industrial revolution’ is simply never going to happen.

James Woudhuysen

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Topics Politics Science & Tech UK

Towards the end of last summer, Britain’s energy debate came to be dominated by a new myth – that electricity generated by wind turbines was nine times cheaper than that created by gas-fired power stations. The claim was central to Labour leader Sir Keir Starmer’s New Year’s speech, and he reiterated it at a reception for business leaders on 30 January. Yet now we don’t hear it anymore. Why?

The short answer is that international gas prices are down again from their peak in the summer, which was largely due to sanctions on Russian gas and the effects of lockdowns. Meanwhile, manufacturers of wind turbines are hurting. Thanks to rising interest rates and inflation in the cost of turbine raw materials, such as steel and copper, turbine makers have upped prices on their machines. Denmark’s Vestas, which has the largest installed wind-turbine capacity in the world, raised its average selling price from €710,000 per Megawatt of capacity (MW) in the final quarter of 2020, to €1,150,000 per MW in the final quarter of 2022 – an increase of 62 per cent. And now Vattenfall, which is owned by the Swedish state and had planned several large wind farms off the Norfolk coast, has pleaded with UK chancellor Jeremy Hunt to give it special tax breaks and / or subsidies in his budget this week. So too has Denmark’s Ørsted, which wanted to build near Vattenfall’s installations. Both were unsuccessful.

The increasing cost of turbines means that the prospects for wind power in the UK are not nearly as rosy as they seemed just six months ago. Britain’s sclerotic state bureaucracy has not helped matters, either. Just last week, the deep green Climate Change Committee (CCC), which advises the UK government on climate matters, warned that the official target of decarbonising UK electricity supply by 2035 ‘will not happen’ without an annual build rate for offshore wind about 40 per cent higher than the highest achieved in 2022. According to CCC chairman Lord Deben, this would require a ‘rapid overhaul of the planning system and regulations’.

The warnings from both turbine manufacturers and the CCC are a reminder that wind power is, ultimately, an industry like any other. Wind turbines are subject to the same unpredictable market forces, and the same pettifogging government delays, as any other source of energy generation.

Indeed, the prospects for other energy sources are dim, too. Take nuclear power. The 3.2 GW nuclear power plant currently under construction at Hinkley Point is struggling with endless delays and cost overruns. The Heysham 1 and Hartlepool power plants currently produce around 2 GW of supply, although they are due to go offline in 2026. Rolls Royce’s much-vaunted plan to produce the next generation of small modular reactors (SMRs) now appears in peril as well. It has frozen hiring as a result.

As for gas, the Rough gas-storage facility in Yorkshire, which closed in 2018, has thankfully been reopened. However, it is currently just 28 per cent full, and may be too dilapidated ever to reach full capacity.

In the face of these energy woes, politicians of all parties like to claim that a green jobs boom, bringing both economic growth and energy security, is just around the corner. Last year, the government declared plans to support ‘up to 480,000 skilled green jobs’ by 2030. Shadow chancellor Rachel Reeves claims that a Labour government would deliver 450,000 new green jobs over a decade, through ‘new industries and the future of economic thinking’. But just how realistic are these ambitions?

Britain’s onshore wind farms employed just 4,400 people in 2019. Offshore wind accounted for 31,000 direct and indirect jobs in 2021. As part of Britain’s supposed green-energy transition, the Offshore Wind Industry Council estimates that overall numbers will reach 97,500 by 2030, more than tripling the size of the industry. Meanwhile, trade association Solar Energy UK has claimed that the solar power industry ‘could support’ 60,000 jobs in 2035, a more than tenfold increase on Britain’s 5,500 solar-power jobs in 2020. Both claims are little more than estimates. They are based on the assumption that the government’s plans for a green-energy Britain will materialise simply because it says they will.

Even taking these ‘forecasts’ at face value, renewables will offer scarcely 120,000 new direct jobs over the next decade. If such a feat were achieved, that would reduce UK unemployment, which stands at 1.25million, by less than 10 per cent. Not even the most optimistic predictions are pointing to a green-jobs bonanza.

Other much-touted sources of green jobs – in hydrogen power, carbon capture and storage (CCS) and installing heat pumps and home insulation – will barely make a dent in the government’s 480,000 jobs pledge.

Hydrogen is broadly a non-starter as an energy source. Even still, the CCC worries that producing hydrogen will account for a ‘significant proportion’ of future UK water use – and that climate change may limit the amount of water available for hydrogen production. Perhaps this is why the government expects that hydrogen power ‘could’ support just 12,000 jobs by 2030.

Meanwhile, jobs in CCS technology in the UK’s North Sea have ‘the potential’ to support up to 50,000 jobs in 2030. As for heat pumps and insulation, government investment in this sector is also stalling: a third of the £6.6 billion allocated by Whitehall for such initiatives between 2020 and 2025 remains unspent.

Time and again, the reality of these green industries is distinctly underwhelming. Yet this has done nothing to dampen the wild green rhetoric of our political class. Labour, for instance, has blithely set a target for Britain to dispense with gas by 2030, part of a manifesto pledge to ‘create jobs, cut bills and boost energy security’. According to the Institute for Government’s analysis, meeting that target ‘would be very tough – not least given the huge task of upgrading the UK’s outdated grid’. In other words, this is a terrible idea. Nevertheless, according to this technocratic think-tank, the pledge ‘makes sense as a strong signal’ of Labour’s green ‘ambition’.

This is our green establishment in a nutshell. To meet the mad requirements of Net Zero, policymakers end up spouting delusional claims about renewable energy somehow providing us with cheap and abundant energy, or about a green-jobs boom that can reverse decades of deindustrialisation. Everyone knows these policies won’t work and will prove ruinous to Britain’s economy. But for our green-obsessed elites, at least they are sending out the right virtue-signal.

James Woudhuysen is visiting professor of forecasting and innovation at London South Bank University.

Picture by: Getty.

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Topics Politics Science & Tech UK

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