Britain’s plan for decarbonisation is twofold. First, establish a very low carbon electricity grid. Second, shift households, businesses and industries away from fossil fuel-powered technologies and onto this clean electricity.
The second step, electrification, is where the strategy succeeds or fails. It does not matter how clean the grid is if mass switching to electricity does not happen.
The strategy is currently failing. Multiple Government forecasts of electricity demand over the last two decades have consistently predicted large increases in demand which have failed to materialise.
The opposite has happened. Electricity use has gone down. The facts are stark:
- Electricity use has fallen by 16% in Britain since 2005.
- Only Yemen, Zimbabwe, Jamaica, Tajikistan and Syria saw electricity demand drop by more per capita since 2000.
- Only 17.5% of Britain’s primary energy consumption is electric.
- At our current rate since 2000, reaching the electricity consumption levels required to meet Net Zero 2050 targets will take over 300 years.
What is holding electrification back? The Government is asleep at the wheel when it comes to prices. Mass electrification is not happening because Britain has some of the most expensive household and industrial electricity in the world.
There is too much focus on the wholesale portion of electricity bills, which makes up only a third of the overall cost. The other two thirds - running a renewables-heavy grid, subsidies, levies and other policy driven costs - are creating a vicious cycle. Expensive electricity holds down demand, which means the fixed costs of the grid are shared between fewer users. Bills go up as a result.
The solution is also twofold. First, do everything possible to lower the price of electricity - our recommendations include legislating for faster and cheaper nuclear power, reforming the energy market to cut waste and removing unnecessary taxes and levies from energy bills.
Second, the Government must return to forecasting electricity prices (and their effect on demand) to ensure plans for electrification are realistic.
Only when the Government comes clean on bills can running Britain on clean electricity be an achievable aim.