Prime Minister Rishi Sunak's claim that he is putting the public purse first by rescinding a ban on petrol cars, at a time of high inflation and interest rates, is looking a lot like a bargaining tool to cover for a debacle in Conservative energy policy.
There was once a time when the Tories sought to be the “greenest government ever”. Roll back to 2010 and that was one of David Cameron's promises for the incoming government.
This bold statement was followed by a dismally unpopular Green Deal loan scheme for home insulation, cuts to the popular feed-in tariff for renewable power and a kowtow to Cotswolds electorate not-in-my-backyard sentiments (NIMBYism) by banning onshore wind farms.
Now the UK is about to head into Autumn 2023 with zero offshore wind power procured in the government’s latest offshore wind auction, being forced to repeal a ban on onshore wind to plug a gap it will have to account for to meet looming net zero targets.
Sunak said yesterday that he has delayed a ban on the sale of new petrol cars to 2035 and further dismantled plans to tackle climate change by delaying phasing out oil and gas burners in order to secure approval from a country of people still entrenched in a prolonged cost-of-living crisis.
He said at a press conference: “If we continue down this path, we risk losing the British people and the resulting backlash would not just be against specific policies, but against the wider mission itself.”
In reality, the country lacks sufficient electric-vehicle infrastructure to facilitate the planned ban on petrol. This is due to a lack of investment in charging points, no doubt at least in part because of the loss of the Green Investment Bank.
That bank helped provide loans and leverage cornerstone investments in sustainable technologies, but was disposed of by the government in 2017, replaced by the not fully fit-for-purpose British Business Bank until the government realised its mistake and considered forming a Green Investment Bank 2.0. Likewise, the Department for Energy and Climate Change was completely axed by the Tories in 2016, replaced only partly by the broader government department for Business, Innovation and Skills.
Without a large part of the future energy supply being secured by offshore wind power, which is now significantly cheaper than gas and nuclear, the country’s supply of the electricity needed to fuel electric vehicles is depleted.
One of the great symbols of progress towards net zero in recent years has been the renewable power industry’s incredible feat of dramatically shrinking the cost of wind and solar power.
In 2012, it cost £150 (£167 in today’s money) to secure a single megawatt-hour (MWh) of electricity from an offshore wind farm under auction. Last year, the government bought wind power at a strike price of only £37.35 per MWh. This made wind power nine times cheaper than gas.
Yet the still nascent renewable power industry is not immune to inflation, and power producers such as Swedish state utility Vattenfall have warned of a 40% rise in supply chain costs. Do the maths and that inevitably makes wind power production more expensive now than it was a year ago.
Sunak refused pleas to raise the strike price offered for renewable power under the contracts-for-difference (CfD) scheme for offshore wind. The government offered an administrative strike price of £44 per MWh for its fifth auction, not nearly enough to cover the inflationary price tag.
This means that without offshore wind, the country will be relying on expensive nuclear to provide future baseload power, with the nuclear power plant at Hinkley Point (costing £92 per MWh) in Somerset suffering delays for many years, and a lingering unsolved nuclear waste storage problem that ignores for a moment Europe's worrying history with nuclear power disasters.