£1300 annual household bill for Net Zero grid

• Grid operator’s report  puts investment cost at £1300 per household

• Net Zero Watch warns that this is only the tip of the iceberg.

• Grid operator confirms costs of Net Zero exceed benefits

The National Energy System Operator’s report to Ed Miliband, published today, indicates the scale of the cost burden that public will face as the result of the Secretary of State’s ambitious plans for a Net Zero grid by 2030.

The report suggests that the annual investment cost alone exceeds £40 billion, or £1300 per household. Worse still, campaigning organisation Net Zero Watch says that this is only the tip of the iceberg. Its director Andrew Montford said:

Once higher operating costs are taken into account, the bill for Mr Miliband’s Net Zero grid could be 20% higher still. And consumers should understand also that this is only the cost for the electricity grid. It may only represent a quarter of the cost of decarbonising the whole economy.

And in a bombshell revelation, the report also indicates that pursuing a Net Zero grid by 2030 is a mistake. Even when global warming harms are taken into account, the costs of the project exceed the benefits.

This is shown by the report’s Figure 20, reproduced below, which compares two pathways to Net Zero to a counterfactual, in which no further action is taken. All of the estimates include a figure for the carbon price, representing the harms caused by global warming.[1] Reduction of these harms is the benefit of Net Zero, and the NESO paper therefore represents a cost-benefit analysis of the project.

But despite the underlying assumptions being greatly biased in favour of Net Zero,[2] the Counterfactual pathway is the lowest cost option.

Net Zero Watch director Andrew Montford said:

The NESO report confirms the findings in our recent paper[3] – the costs of Net Zero exceed the benefits. We should also say that if realistic assumptions are used, then grossly so. Net Zero should be cancelled. It is irrational.

Notes for editors

[1] NESO uses a carbon price of £147/t, which is much higher than typical estimates of the cost of the harm done by global warming – the so-called social cost of carbon (SCC). The US government figure for the SCC is around £40/t. The UK government has no official estimate for the SCC, but uses a “target-consistent” carbon price =- in other words, the carbon price necessary to deliver the Net Zero target. This therefore presupposes that Net Zero is a rational step, rather than being the question at issue.

[2] As well as the unrealistic carbon price already noted, NESO uses DESNZ’s predictions of the cost of renewables, which have been widely criticised by experts as being unrealistic, and which have already been falsified. https://x.com/aDissentient/status/1846488022373552413

[3] https://www.netzerowatch.com/all-papers/a-cost-benefit-analysis-of-net-zero