Britain could save £320BILLION by ditching green power targets, major new report claims

The radical blueprint would abandon Labour’s Clean Power 2030 target and instead build Britain’s electricity system around a mixture of nuclear, renewables and gas.

It would also scrap carbon charges which make electricity produced from fossil fuels more expensive.

Gas power stations currently have to pay for the carbon dioxide they produce. Those costs feed into the cost of generating electricity and, ultimately, can affect the price paid for power.

The report, by Think Tank Onward, argues removing those charges, while retaining gas to provide reliable electricity when needed, would help dramatically cut the cost of the system.

Using 2027 as its starting point, the study calculates annual household electricity bills would be around £200 lower by 2035 under its cheaper-power plan, compared with just £50 lower under current policy.

By 2050, bills would be around £300 lower than in 2027 under the alternative, compared with £130 lower under the existing approach.

The report, The Case for Firm Power, delivers a direct challenge to Ed Miliband’s argument that the Government’s dash for renewable energy will ultimately deliver cheaper power.

Researchers say Britain could make the huge savings while still producing around 80 per cent of its electricity from clean sources.

Former Energy Secretary Claire Coutinho will use the findings to accuse Labour of trying to squeeze “every last drop of carbon” out of Britain’s electricity system regardless of the cost.

She is expected to say: “Ed Miliband’s Clean Power 2030 target is intent on squeezing every last drop of carbon out of our electricity no matter the cost.

“But making electricity expensive puts electrification out of reach for ordinary families, and it’s moving our industry to more polluting countries overseas – forcing us to import back those same goods with higher emissions.

“That is not improving the climate. It is madness – especially when electrification is a far bigger prize than perfectly clean electricity when it comes to reducing emissions.”

The study compares the likely evolution of Britain’s electricity system under current policy with an alternative which puts cheap and reliable power first.

Between 2030 and 2050, researchers calculate the alternative would save £320billion in electricity system costs.

The biggest saving would come from avoiding some of the vast expansion of Britain’s electricity grid required under current plans.

Labour’s strategy requires huge quantities of new renewable generation to be connected, including wind farms hundreds of miles from the homes, factories and businesses which ultimately use their electricity.

Onward’s alternative would instead build more nuclear and gas generation closer to existing grid infrastructure.

It calculates that could cut £137billion from network costs over the 20 years.

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Further savings would come from removing carbon charges and reducing the cost of balancing the grid – including occasions when generators can be paid to reduce output because electricity cannot be moved to where it is needed.

The report comes amid growing concern over Britain’s expensive electricity.

In 2024, Britain had the highest industrial electricity prices among International Energy Agency member countries, according to the report, and the second-highest household prices, behind Germany.

Since 2005, UK electricity prices have risen by more than 130 per cent in real terms while electricity consumption has fallen by 21 per cent.

Ed Hezlet, Onward’s head of energy, said: “Britain has spent twenty years building an electricity system that is more expensive than almost any of our competitors.

“Bills have more than doubled in real terms and consumption has collapsed.”

He said Clean Power 2030 “doubles down on that mistake”.

“It means we pay to connect wind farms hundreds of miles from where power is needed, pay for backup systems for when wind doesn’t blow and pay carbon taxes on top.

“Households and businesses pick up most of this tab.”

At the heart of the report is a warning that Britain is losing reliable sources of electricity while becoming increasingly dependent on power which varies with the weather.

Britain’s “firm” generating capacity – power which can be switched on when it is needed -has fallen by nearly 40 per cent since 2010.

And 80 per cent of Britain’s existing nuclear capacity is due to close by March 2030.

Onward argues Britain should reverse that trend by building more nuclear and retaining gas-fired generation.

Under its alternative plan, gas would still provide 23 per cent of Britain’s electricity in 2050.

Mr Hezlet said: “There is another way, a system built with more reliable generation in the mix – meaning nuclear, gas and renewables, closer to existing grid infrastructure.

“Cheap and reliable power is not the enemy of decarbonisation.”

But the cheaper system would come with an environmental price.

Keeping gas would result in an additional 524 million tonnes of carbon dioxide being emitted by 2050 compared with the current pathway.

Onward argues, however, that eliminating those emissions under existing plans comes at an extraordinarily high price.

It calculates the additional cost works out at more than £600 for every tonne of carbon dioxide removed – more than twice the highest carbon price used in Government modelling.

Ms Coutinho said: “This is the most detailed costing of our electricity system that’s ever been done by any think tank or the British Government.

“It finishes the work I started in Government that Ed Miliband cancelled – a true costing of renewables which shows they are not cheaper when you take into account their full system cost.

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“It shows we can save consumers a whopping £320billion on their energy bills over the next 20 years and still have electricity that is 80 per cent clean.”

The Conservatives argue the findings support their decision under Kemi Badenoch to abandon the UK’s current Net Zero target.

Ms Coutinho will say: “Rather than forcing people to do what we want, our job as politicians should be to lift the barriers in their way.

“That’s why we should focus all our attention on making electricity cheap, and then let consumer choice be king.”

Ahead of the speech, Conservative leader Mrs Badenoch said: “Britain needs a serious plan to deal with climate change. Seriousness means looking at results, not simply setting targets and congratulating ourselves afterwards.

“Current Net Zero targets have driven up energy costs, weakened our industrial base, and made us more dependent on energy imports, while doing too little to make the country more resilient to floods, droughts, and other consequences of the changing climate.

“This report shows what a common sense approach looks like. Unlike Labour, who are wedded to the old failing plans; or Reform, who still don’t believe climate change is happening, the Conservatives will protect our environment, protect our energy security and make energy cheaper. Our plan means using our own oil and gas in the North Sea, removing unnecessary costs from energy bills, and backing cheap, reliable, abundant energy for homes and businesses.”

But energy campaigners challenged the findings, warning that greater reliance on gas could leave Britain exposed to volatile international prices as North Sea reserves decline.

Jess Ralston, Head of Energy at the Energy and Climate Intelligence Unit, also questioned whether gas and nuclear would deliver the promised savings.

She said: “Cheaper power would help boost that further, reducing our oil and gas demand and so our vulnerability to the next energy crisis, but there’s no guarantee that nuclear or gas would deliver cost reductions while we know that renewables lowered the wholesale price of electricity by a third last year.”

The Government argues its clean-power programme will ultimately cut bills and protect Britain from volatile international gas prices.

Labour accused the Tories of “following Reform’s lead” in their policy direction on oil and gas, which they said would “tie Britain to the fossil fuel rollercoaster and keep bills higher for families.”

Energy Secretary Miatta Fahnbulleh said: “Labour is investing in more clean energy jobs, cutting tax on electricity bills to give families breathing space this winter and we’re taking action to tackle the climate crisis and bring down bills for good. Kemi Badenoch would put jobs at risk and increase bills.

“As global fossil fuel prices continue to rise amid conflict overseas and wildfires rage across the UK, we can’t turn our back on clean power. That won’t bring down bills and it won’t address the climate crisis. The Tories don’t have a clue.”

The Government believes that the “flawed” proposals would leave the energy system more exposed to gas price volatility, with price spikes more likely.

Ditching the carbon taxes could also lead to trade tariffs with Europe.

The cost of building and operating a new gas station was higher than renewable sources of generation, its data shows.