Ed Miliband’s promise to cut household energy bills by £300 has suffered a double blow — with the expert behind the calculation warning the savings could be “wiped out”, and Tony Blair’s think tank urging the government to prioritise cheaper, not just cleaner, power.
Economist Pawel Czyzak, who authored the 2023 Ember report underpinning the pledge, has today told the BBC that the analysis “needs to be updated” to reflect the higher costs of offshore wind and other market changes.
In a separate intervention, the Tony Blair Institute (TBI) has called for the Labour government’s Clean Power 2030 plan to be reframed as Cheaper Power 2030, warning that “if the transition to renewable energy continues in a way that raises costs, weakens reliability and weakens growth, it will fail both practically and politically”.
The TBI report is critical of the current approach to the North Sea oil and gas industry, which has left the UK increasingly reliant on imports.
It states: "This import dependency has real costs. In 2023, the UK spent £117 billion on energy imports, double the 2021 figure, while tax revenues from oil and gas extraction are declining rapidly.
"To supplement lower domestic production, and in particular after the removal of Russian pipeline gas to the European continent, liquefied natural gas (LNG) imports have grown by 171 per cent between 2018 and 2023.
"An increased reliance on LNG has increased the cost of gas and exposure to volatile markets, making the UK less energy secure and vulnerable to higher prices.
"Import dependency has left the UK exposed to price volatility and geopolitical risk – and the failure to build a domestic alternative based on abundant, low-cost electricity is now the country’s central energy challenge."
Despite the criticism, the Energy Secretary has stood by his promise, saying the government “stands by its commitment” to lower bills by 2030.
Mr Miliband said UK households were paying more “because of our dependence on fossil fuels” and the spike in gas prices after Russia’s invasion of Ukraine. His department said it remained “determined to bring down bills, for good, and stand by our commitments”.
Mr Czyzak stressed that the £300 saving “was always dependent on a significant drop in wholesale electricity costs” as renewables became cheaper and more dominant.
He warned that if grid upgrade costs rise and power prices stay high, “then it’s going to be hard to generate savings”. “So then, yes, there is a risk of these savings being wiped out if we can’t get the actual electricity cost down,” he added.
The Department for Energy Security and Net Zero added: “By making Britain a clean energy superpower we are getting the UK off the rollercoaster of fossil fuel prices and onto clean, homegrown power that we control.”