Do Cry For Me, Rachel Reeves

The Government's Net Zero Addiction Means Growth Is Impossible.

Rachel Reeves’ tears illustrate the wisdom of Wilson, MacMillan and Powell that “A week is a long time in politics”, “Events (dear boy), events” are in charge and that “All politics ends in failure.” The government is making more fast U-turns in a month than Lewis Hamilton has in an entire Formula One career. Yet the government remains wedded to Net Zero, an unaffordable folly? Why?

Successful companies listen to their customers. Successful Prime Ministers listen to their backbenchers. Successful political parties listen to their donors. Vince Dale has given the Labour Party at least £5.5 million pounds, having made his money from the subsidies paid to wind farm operators. Little surprise then that despite the enormous challenges of delivering Net Zero (set out in my book) this government continues to press on regardless.

Ed Milliband’s latest plan is for people who own semi-detached and terraced houses to be allowed to erect small domestic wind turbines without planning consent. Almost uniquely for Red Ed, this idea makes some sense; a domestic wind turbine and battery storage can generate a fair proportion of the average home’s consumption.

Such installations typically cost £3,000 to £100,000 depending upon size giving a payback of about 15 years. While a 6.6% return is attractive, not everyone has that kind of money to speculate - and it is a speculation as the domestic electricity price is set by politics, via the energy price cap. Whether that return (if it materialises) is enough to compensate for the ire of your neighbours is another matter.

Unfortunately Ed’s proposal also mentions allowing the small domestic turbines to sell electricity back into the grid when they have a surplus. While that might improve the installer’s finances it adds a huge level of complexity to a grid that is already under enormous pressure. National Grid has yet to explain why it disastrously deferred vital maintenance to the Heathrow substation for seven years. Such reckless risk taking is surely indicative of a failing system - the last thing it needs is hundreds of thousands more intermittent small suppliers.

Plan-Ed also exacerbates grid instability. Any power grid must match supply with demand on a second by second basis. This is largely achieved through the mechanical inertia of massive turbines spinning, which instantaneously damps the difference between supply and demand, giving grid operators time to start or shut down other power stations and trade electricity over the interconnectors. As Spain and Portugal found out the hard way, solar and wind generation lack inertia. Supply and demand went out of kilter and a vast blackout followed as safety devices tripped. That blackout killed seven people – unstable grids are dangerous and net zero makes grids unstable.

That the British grid is running out of nuclear power stations is reasonably well known. However the gas powered power stations that still comprise over 35% of production and rather more of capacity are also aging. They can’t be replaced by wind so a wise minister would get on with encouraging getting new ones built, a process that takes several years as the supply chain is tight.

Worse, old plants are less reliable, require more maintenance and are run for fewer hours so the electricity they generate is more expensive. There’s no way round this; the gas power stations built in the “dash for gas” need replacing with more gas power stations. In that context the government’s long overdue decision to build Sizewell C and Rolls Royce Small Modular Reactors (SMR) is the only good news in an increasingly dark future.

That sensible decision rather upset Vince Dale. On the BBC’s World at One he aired his concerns and continued to propagate lies and misinformation. Inevitably the presenter, Sarah Montague, didn’t’ challenge him. Allow me. Dale said that spending £40 billion on wind would solve the UK’s electricity shortage, provided there were lots of batteries, pumped storage or tidal lagoons.

The UK consumes an average of 737 gigawatt hours (GWh) of electricity a day. We currently have 26.2 GWh of pumped storage and 7 GWh of batteries. That’s enough to run the country for about an hour.

As Dale must know, the primary purpose of pumped storage and batteries is not to store electricity for the three months a year that most wind turbines don’t generate. It exists to maintain the balance between supply and demand that keeps the grid stable. Dale must also know that energy storage is far from cheap. Dinorwig, the largest pumped storage site in the UK with a capacity of some 9.1 GWh, cost £450 million when it was built in 1984. At today’s prices that comes out at some £200 million per GWh. Batteries come out at about £500 million per GWh. That is appallingly expensive, but such is the nature of Net Zero.

Dale went on to advocate tidal lagoons, which he rightly said provided predictable power. He didn’t mention that the tides timings don’t match demand any more than wind does. Nor did he mention cost.

The second largest tidal fall in the world is at Swansea. If it can’t work there it can’t work anywhere. There have been a plethora of designs for a Swansea tidal lagoon. The last plan was axed in 2015 as it didn’t offer value for money. However the Swasnea tidal lagoon concept never dies; it’s coming back on the agenda.

Unfortunately for its proponents the maths will never add up. The average tide at Swansea is around 8.5 metres. The average height above sea level of the water inside the lagoon is half that. GCSE physics tells us the amount of energy stored in an elevated mass is mass x height x gravity. For the latest version of the tidal lagoon it comes out at around 22GWh in a full, 11.5 square kilometre lagoon. That’s about two Dinorwigs. The last lagoon’s cost estimate was £1.3 billion, some six Dinorwig’s. Storing two Dinorwigs of energy at six times the cost is economic madness that can only drive energy prices up.

In the sensible world one would simply build a nuclear or gas power station, reliably delivering electricity when needed. Dale may think a tidal lagoon is a solution, but he’s built his £100 million fortune on wind power. That industry has seldom been troubled by the realities of economics or physics because its advocates (who include the BBC) lie about “free wind”, ignore the ruinous cots of intermittency and if challenged spread panic about climate change. Some trouser a few quid as well.

Which returns us to the question of why this government is sticking with Net Zero.

We’re in an economic mess, exacerbated by Reeves’ tears. The price of UK debt spiked when the market saw her tears on Wednesday. They’ve subsequently slipped, but not back to the pre-lachrymation level. The bond market is increasingly aware that UK national debt is out of control and that the servicing costs themselves are a major cause. The UK is borrowing to pay the interest bills which, as any competent banker or accountant would tell you, is a sure fire route to insolvency.

The IMF is not yet panicked, but it has slashed its growth forecast for the UK. The only hope that the UK has of balancing its books -or even reducing its deficit – is through private sector growth. Growth means more energy is required (especially if it includes electron-hungry AI, this government’s cure all). Net zero makes energy both more expensive and less reliable. Net Zero inhibits growth and this government’s acquiescence to the Miliband / Dale / Thunberg obsession will lead to economic meltdown. It won’t just be the Chancellor crying then.

Surely £5.5 million doesn’t buy so much influence?

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