The government has stated that gas prices are expected to remain elevated due to ongoing geopolitical instability, a position that underscores the contentious debate over energy policy in the UK.
Tony Blair Institute's Report Criticises Green Agenda
In a report released on Friday, the Tony Blair Institute (TBI) has accused Ed Miliband, the energy secretary, of contributing to higher energy prices through his efforts to make Britain's energy supply more environmentally friendly. The thinktank, founded by former Prime Minister Tony Blair, has called for the government to abandon certain green policies, including the ambitious target to almost completely decarbonise the electricity system by 2030.
Growing Criticism from the Right
This report adds to mounting criticism from right-leaning groups regarding the government's approach to decarbonisation, further intensifying the rivalry between Blair and Miliband, both former Labour leaders, over climate strategy. Authored by Tone Langengen, the institute's senior energy policy adviser, and endorsed by Blair, the report argues that the Clean Power 2030 initiative is no longer viable in today's changed economic, technological, and geopolitical landscape.
The report states: "The UK's energy framework has not adapted to these new circumstances, and as a result, policy is drifting away from the fundamentals it must serve."
Pressure on Miliband to Reduce Bills
Ed Miliband faces significant pressure to lower energy bills, having pledged before the election to reduce them by an average of £300. This week, Chris O'Shea, chief executive of Centrica, warned that electricity prices could be higher in 2030 than during the peak of the Russian invasion of Ukraine, highlighting the urgency of the issue.
A Labour source responded, defending the government's stance: "The mainstream, centre-ground position, backed by economics and British business, is that transitioning from expensive fossil fuels controlled by petrostates to clean, homegrown power is the right choice for Britain."
Blair's Previous Criticisms and Motivations
Tony Blair has previously criticised the government's energy policies, asserting last year that the push to phase out fossil fuels was "doomed to fail" and that the climate debate was "riven with irrationality." Blair's thinktank, which collaborates with governments of petrostates like Saudi Arabia, argues that the government's firm targets for clean power commissioning, regardless of cost, are driving up energy prices.
Similar arguments have been echoed by the Conservatives and Reform UK, who have promised to abandon the UK's central climate commitments if they gain power. However, the TBI maintains its support for the net zero by 2050 ambition.
Government's Offshore Wind Initiatives
Last month, the government commissioned 8.4GW of offshore wind capacity, claiming it puts the UK on track to meet the 2030 decarbonisation target. The average price was £60.25 per megawatt-hour (MWh), a 50% increase from 2019 prices. Ministers argue this compares favourably with the cost of new gas power, but the TBI report contends that gas prices, currently high due to the war in Ukraine, will decline over the long term.
A spokesperson for the energy department countered: "Our clean power mission is the only way to bring down bills for good. The alternatives leave Britain dependent on petrostates and dictators, whose control of fossil fuel markets helped drive the cost of living crisis."
Calls for North Sea Drilling and Tax Changes
The TBI report also advocates for increased drilling in the North Sea and the removal of the windfall tax on oil and gas companies. It emphasises that in a world of rising energy demand and geopolitical competition, domestic production should be treated as a strategic asset rather than a moral signal.
Blair claims his motivation is to assist cash-strapped consumers and ensure sufficient electricity generation for the AI revolution. Critics, however, suggest he is driven by financial interests, as his institute receives tens of millions in donations from figures like Larry Ellison, co-founder of Oracle, which is heavily investing in AI software.
A TBI spokesperson defended their work: "Our analysis is based on data and global trends, not influenced by our engagements in energy-producing countries."
