Ministers are considering dropping one of their central green pledges in an effort to keep energy bills down, sources have told the Guardian. Government insiders say Keir Starmer is prepared to miss his own target of removing almost all fossil fuels from the UK’s electricity supply by 2030 if doing so proves much more expensive than building gas power instead.
The issue will come to a head within weeks as Ed Miliband, the energy secretary, decides how much renewable energy to commission for the next few years. Allies say Miliband is willing to buy less than experts say is needed to hit the 2030 target, if paying for them would push energy bills much higher than their current levels. Concern is growing in Downing Street that the cost of living is fuelling the rise of Reform UK.
One government insider said: “There is a choice about what price you’re willing to pay for the next [renewables] auction round, which is key to hitting 2030. If it comes to a choice between hitting the target and overpaying, or missing it and keeping costs down, we will miss it.” Officials pointed to comments Miliband made last week, when he told an energy industry conference: “We won’t buy at any price.”
Experts say that hitting the target would require Miliband to commission a record 8 gigawatts of new electricity generation at the current auction round. But energy industry insiders say high interest rates and the sheer amount of electricity that needs to be commissioned is likely to push prices beyond what it would cost to build the equivalent amount of gas power. Dieter Helm, professor of economic policy at the University of Oxford, said Miliband was “deluded” if he thought he could bring down energy bills by pushing for clean power by 2030.
A report published on Thursday by the Tony Blair Institute argues the government should drop the 2030 target altogether while sticking to the longer-term net zero commitment. Some officials in Downing Street and the Treasury want the prime minister to publicly drop the 2030 target in a sign to both voters and the energy industry that he is not willing to let bills rise. Starmer is resisting this, and is instead understood to be willing to simply miss the target rather than openly disown it.
