A report prepared by the conservative Onward think tank to calculate an alternative pathway for UK energy policy is facing widespread criticism over its assumptions concerning gas, nuclear power and grid costs. The report claims that abandoning net-zero policies could save the UK more than £320bn and make electricity cheaper, but Carbon Brief’s analysis finds that the proposed scenario would in practice lead to less electrification and higher emissions.
A model prepared by Transira Energy compares two pathways through to 2050. The first is a “business as usual” pathway based on current net-zero policies, while the alternative assumes that the economy-wide net-zero target would be scrapped after the next election in 2029, along with targets for electrifying transport and heating, while reliance on gas and nuclear power would increase.
Cheaper electricity, but less electrification
The Conservatives’ argument is that lowering electricity prices would encourage consumers to buy electric cars and heat pumps, thereby accelerating emissions reductions. However, the model’s own results contradict this premise: the alternative pathway is projected to emit an additional 524 million tonnes of carbon dioxide between 2030 and 2050, equivalent to South Africa’s annual emissions, according to the article.
The model also projects slower uptake of electric cars and heat pumps, despite lower electricity prices, as a result of scrapping support schemes and regulatory commitments, including the Boiler Upgrade Scheme and the ban on sales of new petrol and diesel cars from 2030. Total electricity consumption in the alternative pathway falls by 7% compared with the current pathway, meaning that part of the “saving” results from electrifying fewer sectors.
Tara Singh, chief executive of RenewableUK, points out that the model excludes the cost of fuels that would replace electricity if more petrol and diesel cars remained on the roads. She estimated that the additional fuel spending for these cars could range from £65bn to £95bn over two decades, a cost not included in the alternative pathway’s calculations.
Gas assumptions are the biggest weakness
The scenario assumes that gas prices will fall to pre-conflict levels and remain low and stable throughout the next two decades. But energy crises linked to the war in Ukraine and disruptions to fossil-fuel supply chains have demonstrated the exposure of prices to geopolitical shocks. According to analysis by E3G and ECIU, four years of elevated energy prices cost the UK £183bn.
The Onward report acknowledges that its alternative pathway would be more exposed to a future shock in gas prices and estimates that a new shock could add £6bn to fuel costs in 2040. Moreover, extracting more oil and gas from the North Sea, a part of the Conservatives’ rhetoric, would not eliminate the link between prices and the global market, according to the experts cited by the article.
The pathway assumes the construction of an additional 21GW of gas-fired power stations by 2050—nearly 20 new facilities and an increase of about 70% over current capacity. However, the assumed construction cost is £650 per kilowatt, far below recent estimates for new gas plants. The article cites a range of $1,116 to $1,427 per kilowatt for planned US projects, along with reports of costs of $2,000 or more, amid global shortages of gas turbines caused by demand from data centres and the transition from coal to gas.
Nuclear power and grids: uncertain savings
The alternative pathway increases nuclear capacity to 20GW by mid-century, compared with 13.3GW in the net-zero pathway. But it assumes that the cost of nuclear electricity from large plants to be built in the 2040s will range from £122 to £138 per megawatt-hour, with limited detail explaining how costs would fall.
For comparison, the contracted electricity price for Hinkley Point C is about £138 per megawatt-hour for 2030, while the price for Sizewell C is about £150 for 2039. Hinkley Point C’s cost has also nearly doubled since its initial approval, making the assumption of lower costs for future plants questionable.
The report attributes £137bn of the £320bn in savings to lower grid costs, by reducing the need to connect renewable sources located far from demand centres. But the alternative pathway still includes 32 million electric or hybrid cars, more than 6 million additional heat pumps, 45GW of gas and 20GW of nuclear power, as well as demand from data centres. Experts therefore questioned the plausibility of cutting new transmission investment from £137bn in the baseline pathway to just £19bn.
Other experts point out that the report may count grid savings and system-balancing costs in overlapping ways. Expanding the grid can reduce constraints and congestion-management costs, while leaving the grid unexpanded increases those costs. The National Energy System Operator estimated that retaining the current transmission network through 2030 without expansion could raise constraint costs to about £12.7bn a year, whereas expansion could reduce them by up to 75%.
What does this mean in practice?
The basic objection is not that renewables have no integration costs, but that the Onward report estimates these costs at £125 per megawatt-hour, a figure that Iain Staffell of Imperial College London described as far outside mainstream thinking. A study published in Nature indicates an integration cost of about £26 per megawatt-hour when renewables reach an 80% share of the electricity mix, while Afry puts the total cost of electricity in a high-renewables system at between £55 and £75.
The report also proposes ending Contracts for Difference support for renewable sources after 2030, ending Renewable Obligation payments for wind and solar plants in 2033, and scrapping support for long-duration storage. Analysts warn that reversing existing contracts could weaken investor confidence, at a time when the report assumes that new investment in nuclear power would be attracted through a regulated asset base model.
The “savings” include £94bn resulting from removing power stations from the UK Emissions Trading System, UK ETS, after 2031. But this step would reduce government revenue more than it would save money for the UK; it could mean higher taxes, a larger public deficit or cuts to public services. It could also complicate electricity trading with the European Union and obligations linked to carbon pricing.
As for long-duration storage, the report portrays it as though the 16 projects identified by Ofgem would have to cover national demand all at once during a winter period with no wind or sunshine. Experts view this as an excessive simplification: these projects were designed to absorb surplus generation, reduce peaks in demand and lower balancing costs, not to provide the country’s entire consumption on their own.
Editorial reading: The material reveals that the “cheap electricity” in this proposal is not the certain result of a cheaper technology, but rather the outcome of a model based on low-priced gas, optimistic construction costs, and reduced demand resulting from less electrification, in addition to shifting some burdens onto fuel or public finances. Therefore, open questions about gas prices, network costs, nuclear financing, and investor confidence remain crucial before treating the figure of £320 billion as an actual saving.