Tag: NESO

No, Britain Won’t Be Europe’s Energy Powerhouse

No, it won’t—at least not in any meaningful sense of reliable, affordable, abundant energy that powers industry and households without massive ongoing costs or fragility.

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No, it won’t—at least not in any meaningful sense of reliable, affordable, abundant energy that powers industry and households without massive ongoing costs or fragility.

Ambrose Evans-Pritchard’s August 2026 Telegraph piece is characteristically optimistic about a “winning mix” of nuclear, North Sea oil/gas, wind and solar turning Britain into Europe’s energy powerhouse and net electricity exporter by ~2030, with prices converging toward France and undercutting Germany et al.

The mechanics he cites (offshore wind capacity factors, NESO projections, tech/AI flexibility) are real trends, but they do not overcome structural problems of intermittency, system costs, nuclear delivery failures, depleted domestic hydrocarbons, and policy-driven price distortions.

UK electricity prices remain among Europe’s highest for households and especially industry.

Domestic unit rates under the Ofgem cap have sat well above most EU peers (outside high-tax cases like Germany or Ireland), with industrial prices routinely 50-80%+ above French levels and far above US or many Asian comparators.

Gas still frequently sets the marginal price, and policy costs, network charges, balancing, and capacity market payments load heavily onto bills. High prices have contributed to deindustrialization—refineries, steel, chemicals, glass, fertiliser closures or contractions. This is not a temporary transition blip; it is baked into the system design.

NESO and others project net electricity exports by 2030 under high-renewables pathways.

That is plausible on annual averages if offshore wind (Dogger Bank etc.) scales as planned and demand growth is managed. But annual net export ≠ powerhouse. Surplus often arrives in low-price or negative-price periods (high wind/solar), while deficits in dunkelflaute or peak demand still require imports, gas peakers, or demand destruction.

Constraint payments, curtailment, and the need to build out transmission, storage, and backup mean system costs rise even as pure generation costs for new wind/solar fall. Exporting subsidised power (via CfDs) can effectively mean British billpayers topping up European supplies.

The weak legs of the “mix”

Wind and solar: Excellent resource in the North Sea, capacity factors improving. Tripling offshore and doubling onshore by ~2030 is the plan. But intermittency requires overbuild, firming capacity, and a much larger grid for the same firm power. Dispatchable capacity has fallen sharply over the past 15 years while nameplate renewables rose; the grid’s productivity (output relative to capacity) has suffered. Batteries and interconnectors help but do not eliminate the problem at continental scale.

Nuclear: Hinkley Point C is years late and massively over budget (tens of billions). Sizewell C faces similar risks. Existing fleet is ageing and shrinking. Small modular reactors and fusion remain longer-term bets. Britain is not on a French-style trajectory of high, reliable nuclear share delivering low marginal costs.

Oil and gas: North Sea production is in long-term decline. Policy (tax regime under previous governments, new-field restrictions under Labour) has accelerated run-down rather than maximising extraction. Claims of large remaining recoverable resources under “no constraints” scenarios exist, but investment, geology, and politics make a major rebound unlikely. The UK is a substantial importer of gas and will remain so for years; oil is mostly exported as crude while refined products and petrochemicals face competitive pressure from high energy costs.

Europe as a whole has high energy costs relative to the US or China; Germany’s Energiewende experience is a cautionary parallel (high prices, industrial strain, reliance on imports and coal/gas backups). France’s nuclear fleet remains a relative strength. Norway is the actual hydrocarbon and hydro powerhouse. Britain becoming the “electricity backbone of north-west Europe” by 2035 requires flawless execution on generation, grid, storage, and demand-side measures that recent delivery track records (delays, cost overruns, cancellations) do not support.

What would actually make a powerhouse

Cheap, reliable, scalable energy—ideally firm and domestic or securely imported at competitive prices—drives industry, data centres/AI, living standards, and fiscal capacity.

Current UK policy prioritises rapid territorial decarbonisation of power with heavy subsidy and planning complexity. That can produce large volumes of intermittent electrons and eventual net exports in favourable years, but it has not produced (and shows little sign of producing) low system costs or restored industrial competitiveness.

Gas remains essential for balancing into the 2030s; pretending otherwise raises reliability risks. Nuclear needs faster, cheaper delivery than Britain has managed. Hydrocarbons need pragmatic extraction rather than accelerated phase-down while alternatives are immature at scale.

Evans-Pritchard is right that technology (better turbines, digital flexibility, potential fusion) and the resource base create upside, and that the “sick man of Europe” narrative can be overdone.

The claim that this mix will deliver a flourishing, export-capable, price-competitive system that “pleases both sides of the culture war” within 5–10 years overstates the case.

High costs, delivery risks, and the physics of intermittency are more binding constraints than optimistic capacity forecasts acknowledge. Britain can improve its position relative to a struggling continental Europe, but “energy powerhouse” implies something stronger than net seasonal electricity flows at elevated system cost.

Grid Balancing Costs Set To Rise To £8 Billion By 2030

OFGEM claim that their £80 billion electricity grid upgrade will end up actually reducing bills, by reducing constraint payments.

NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

OFGEM claim that their £80 billion electricity grid upgrade will end up actually reducing bills, by reducing constraint payments.

NESO’s latest review below of balancing costs show this to be an outright lie:

Balancing costs | National Energy System Operator

In 2024/25, total balancing costs hit £2.7 billion, of which £1.7 billion arose from constraint payments. Prior to the Climate Change Act, these balancing costs would have been inconsequential.

Grid upgrades will add about £9 billion a year to bills by 2031. Self evidently, this cost will far outweigh any potential savings. What they might do, of course, is reduce the cost of future constraint bills, which are projected to massively increase:

NESO project that constraint payments could rise to £7.2 billion in 2030, before OFGEM’s £80 billion grid upgrades kick in, dropping back to £2.9 billion in 2031.

In other words, after the upgrades, constraint payments will be just as high as now. If we don’t upgrade, constraints will increase. If we do, network charges will increase.

Either way, our bills go up!

Significantly, NESO state that constraint payments will resume their upward increase after 2031, as more renewables come on stream. This will require yet more grid upgrades, a never ending roundabout it seems!

In fact, NESO have underestimated long term constraint costs.

This is how they define them:

So, for example, there is a lot of surplus wind power in Scotland at times, but not enough transmission capacity to take it south to markets. In large part, OFGEM’s upgrades are intended to solve this problem.

But there is a much bigger problem looming, that no amount of grid upgrades will cure – soon, there will be far more power on the grid on windy/sunny days than there is demand for.

In their Clean Power 2030 Report, NESO reckoned we would have to throw away 83 TWh of excess wind and solar power in 2030 – 22 TWh curtailed and 61 TWh exported at a loss (they hope!).

Last year, the figure was 9 TWh.

Constraint Payments Soar To New Record | NOT A LOT OF PEOPLE KNOW THAT

NESO stressed in their report that their projections assumed full implementation of OFGEM’s network upgrades, so existing bottlenecks are not to blame for the 83 TWh of wasted power.

Indeed, the Counterfactual scenario, which assumes no accelerated progress, is virtually constraint free – the £80 billion upgrades will do their job.

The extra constraint costs are the direct consequence of building out more and more renewables.

So, let’s recap:

  • OFGEM want to spend £80 billion on upgrading the grid in the next five years, adding £9 billion to electricity bills.
  • Expansion of intermittent renewable capacity to meet Net Zero targets will necessitate wasting billions of pounds worth of power, when it is too windy or sunny.
  • Post 2030, tens of billions more will need to be spent to cope with increasing renewable capacity.
  • Far from reducing bills, this never ending cycle of increasing renewable capacity/upgrading the grid will inevitably increase them.

Nobody in their right mind would have designed such a system. Unfortunately by the time of the next election, most of the damage will be irreversible.

A Windy Day!

When it’s a windy day, guess what? We get a lot of wind power!

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

When it’s a windy day, guess what? We get a lot of wind power!

Yesterday we got 60% of our power from wind:

National Grid: Live

It does not take a genius to work out that when Ed Miliband succeeds in tripling wind power capacity, there will be far too much wind power for the grid to handle.

I have analysed the half hourly generation data for the full winter just gone. It’s a fairly basic summary, but my model assumes a tripling of wind output, 4400 MW of fixed nuclear generation and existing demand profile.

It calculates that there will be 19 TWh of surplus wind power during those periods when wind and nuclear exceed demand. Obviously there will be other periods when wind and nuclear cannot supply all demand.

Whatever battery storage we have by 2030 will be far too tiny to make any difference, so most of that 19 TWh will have to be constrained. At a going rate of £100/MWh, that could cost £1.9 billion. And this is just for winter.

With much lower demand in summer and plenty of solar power as well, plenty more surplus electricity will have to be chucked away.

The problem is probably much worse still. Although I have not factored in higher demand, the increased proportion of offshore wind in the mix will increase wind generation above my projections.

There is also the issue of grid stability. I cannot see how the grid can operate stably with above 90% of generation coming from wind at times. Including some dispatchable power to stabilise the grid will automatically increase the projected surpluses.

Thirdly is the question of regional imbalances. Will the grid be able to cope with large amounts of wind power coming from Scotland and the North Sea? It is, of course, lack of transmission capacity which results in constraint payments to Scottish wind farms. OFGEM is busy spending tens of billions upgrading the grid, but whether even that will cope in future must be debatable.

Some of the surpluses are massive, as much as 32 MW on one occasion. Surpluses were above 20 MW on 16% of the three month period. The model also predicts that more than half of wind generation will have to be constrained for 10% of the time.

The practical difficulties faced by NESO in having to implement all of this, every half hour are mid boggling.

Just a glance at yesterday’s generation shows how huge the problem is. Demand was 35.9 GW. Of that, 21.5 GW came from wind and 3.4 GW from nuclear. Triple that wind capacity and you are looking at about 68 GW from wind and nuclear.

Half of that will have to be switched off on average, and more at times of low demand.

CCC Deny Reality

The Climate Change Committee (CCC) has released a new report to complement its 2025 advice on the UK’s Seventh Carbon Budget.

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

The CCC has now published its report, that was quoted in the FT this morning:

​​​​Cost of Net Zero by 2050 less than a single fossil fuel price shock​ – CCC  – Climate Change Committee

The report is remarkably data free, but offers this summary:

As I noted earlier, the benefits mentioned are totally spurious. They say:

“we now incorporate our assessment of co-impacts to fully appraise the value of the Net Zero transition. These include health benefits from improved air quality and active travel, warmer and less damp homes, and healthier eating habits. We also include benefits from avoided climate damages.”

Eat less, give up driving and be grateful, seems to be the message!

As for the monetary costs and savings, they merely reiterate the Seventh Carbon Budget that laughingly claimed the net additional cost would only be £4 billion a year, £100 billion by 2050:

Our Seventh Carbon Budget advice report estimated the additional cost of the Balanced Pathway – our pathway to Net Zero – would be around £4 billion per year on average between 2025 and 2050, relative to a baseline of no further emissions reductions from today

Dishonestly they don’t include the costs we have already incurred and continue to incur for Net Zero. According to the OBR, the bill will amount to £150 billion just in the next five years alone, to cover renewable subsidies and Ed Miliband’s crazy plans.

We also had the NESO analysis published in December, which found that aiming for 80% emission reduction, instead of the 100% demanded in Net Zero, would save 0.4% of GDP every year till 2050 on average. That adds up to £14 billion a year, or £350 billion by 2050.

If we can save £350 billion by slowing down Net Zero, how much more could we save if we dropped the whole idea?

https://www.neso.energy/document/374246/download

As I pointed out at the time, NESO made wholly unrealistic and optimistic assumptions such as price parity for EVs by next year and offshore wind prices of £70.10/MWh. The recent AR7 set prices of £90.10/MWh:

As with all these official analyses, it’s a case of pay now and you might get a spoonful of jam in twenty years time. As I never tire of pointing out, nobody has the slightest what the future will hold in 2050; attempting to analyse it is a fool’s errand.

But what we can realistically estimate are the costs in the short term, the next five or ten years, say.

Again, we can turn to NESO.

They costed Labour’s 2030 Clean Power Plan, and found that it would add £25/MWh in non-generation costs – that’s £10 billion a year, which is of course on top of the current costs we already incur.

The supposed saving on generation costs was fake, as they inflated gas generation costs by including a massive jacking up of carbon taxes. Given what we know of the CfD round, the roll out of wind power will add billions more to energy bills…

NESO did not factor in the power grid upgrades needed for Net Zero, which are estimated to be around £130 billion. Nor did they cost the distribution network upgrades needed to cope with higher electricity demand – even optimistic projections put a cost on this of £200 billion. The eventual bills will, of course, be much higher when return on capital is allowed for.

Meanwhile heat pumps are not coming down in price, as naively believed. A typical household will have to pay a premium of maybe £12000 over above the cost of a gas boiler. With annual sales of 2 million, that adds another £24 billion a year to the Net Zero bill.

And even the CCC cannot deny the fact that carbon capture and hydrogen are horrifyingly inefficient and expensive ways of doing what natural gas does already.

Households are already £800 worse off a year as a result of Net Zero policies on electricity costs, whether directly via energy bills or indirectly via higher taxes and prices.

Based on NESO/OFGEM figures, that figure will likely double in the next few years.

Being forced to buy a heat pump will add another £1000 a year to household costs, including loan interest. And with EVs still costing thousands more than petrol cars, they will be unaffordable for many.

You don’t need a fancy analysis to work out that people will be much worse off if Net Zero policies continue to be enforced.

Constraint Payments Soar to New Record

The cost is actually overstated, because we would still need to pay for one lot of electricity anyway.

As the Telegraph states, this is essentially a Scottish problem, as there is not enough transmission capacity to carry all the wind power south when it is windy. But naively, they then go on to say that OFGEM are spending £90 billion on grid upgrades to deal with this problem.

A snow-covered landscape featuring several wind turbines and solar panels, with footprints leading through the snow.

NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

h/t Philip Bratby

From the Telegraph:

Headline about wind turbines indicating they waste enough power to supply all of London, authored by Jonathan Leake.

Britain’s wind farm turbines wasted enough energy to power all of London’s homes last year, new figures show.

A record 10 terawatt hours (TWh) of wind power went to waste in 2025, according to a report from energy analyst Montel – costing billpayers a total of £1.4bn in “curtailment costs”.

This was up 22pc on the year before, as growing strain on the grid prevented wind power from being transported to the cities and towns that need it most.

This results in so-called curtailment costs, which are paid to wind farms when they are asked to switch off.

At the same time, grid operators must call on gas plants to step in and keep the lights on with replacement power, often at great expense.

Analysts said that wind farms in Scotland were largely to blame.

Montel’s report said: “The amount of renewable electricity curtailed in Great Britain in 2025 (10TWh) could have met the combined electricity demand of every domestic household in London for the entire year.

“Northern Scotland has seen the most curtailment by far. Over 8.8TWh of wind power in northern Scotland was switched off, enough to also power all Scottish domestic electricity demand for the year.”

The cost of curtailment has been growing as Ed Miliband, the Energy Secretary, rolls out more renewable energy sources – such as wind and solar.

As well as paying wind developers, Montel said solar farms are also being asked to switch off because of bottlenecks.

Montel said: “Solar curtailment costs rose over the year to total over £252,000. While this is substantially lower than the corresponding figures for wind, it represents a rise from the negligible costs associated with solar curtailment in 2024.”

To combat curtailment, regulator Ofgem has approved plans for the UK’s three transmission operators – National Grid, Scottish Power and SSE – to spend up to £90bn on new lines and substations.

Full story here.

The cost is actually overstated, because we would still need to pay for one lot of electricity anyway.

As the Telegraph states, this is essentially a Scottish problem, as there is not enough transmission capacity to carry all the wind power south when it is windy. But naively, they then go on to say that OFGEM are spending £90 billion on grid upgrades to deal with this problem.

Plainly we are not going to spend £90 billion to save less than a billion a year. The upgrades are necessary to make the grid Net Zero ready, not just to connect Scottish wind farms.

What nobody at the Telegraph seems to have realised is that by 2030, or whenever Labour’s Clean Power Plan is rolled out, there will be many days when there is more wind and solar power generated than we can actually use.

No amount of new transmission lines will change this simple fact.

NESO analysed this problem in detail, when they reviewed Miliband’s plan in 2024. They calculated that we would have to throw away 83 TWh of surplus renewable energy – incl 61 TWh which they hope to sell at a loss, which is highly optimistic given that Europe will also be awash with surplus wind power.

Table comparing energy metrics in TWh, including customer load, network losses, net export, storage round-trip efficiency losses, renewable curtailment, and electrolysis load across three scenarios.
Table displaying energy data: Net exchange, Imports, and Exports under Counterfactual, Further Flex and Renewable New Dispatch scenarios.
Clean Power 2030 Data Workbook_V003 (3).xlsx

They estimate that we might get £40/MWh for these surplus exports, a loss of £39/MWh. Conversely, we will pay £89/MWh when we need to import!

Table displaying energy prices in £/MWh, including average import price, average export price, and volume weighted average wind/solar strike price for different scenarios.

If we cannot export any surplus, the cost of annual curtailment would be £6.6 billion, based on the average wind/solar price of £79/MWh. That is now an understatement, given the latest CfD auctions.

Annual wind generation is projected to be 245 TWh, so we will end up throwing away a third of it.

Just consider today, for example.

Bar chart displaying GB fuel type power generation production data as of January 22, 2026. Highlights current demand of 39.70 GW, renewable energy contribution of 21.49 GW (54%), and carbon neutrality status.
GB Fuel type power generation production

Wind is currently supplying 43% of our electricity.

Miliband wants to triple that, which will give us 51 GW and 129% of total demand. Add on the 8% from nuclear, which cannot be switched on and off, and we get 137%.

It’s hard to think of a more crackpot way to run an energy system!

Britain at risk of electricity rationing before general election

Britain risks electricity rationing by the next general election unless its fleet of ageing gas-fired power stations is urgently upgraded, a new report has warned.

A cartoon-style illustration of a man in a red and gold armored suit, resembling a superhero, standing confidently in a cityscape with a dramatic cloudy background.

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

A man in a suit making a surprised expression while holding a lit candle in a dark setting.

The Net Zero lunacy gathers pace:

From the Telegraph:

Headline from The Telegraph: 'Britain at risk of electricity rationing before general election' by Jonathan Leake

Britain risks electricity rationing by the next general election unless its fleet of ageing gas-fired power stations is urgently upgraded, a new report has warned.

More than a dozen of Britain’s gas-fired power stations are so old that they may not last until the end of the decade and key parts required to upgrade them take years to arrive on order, energy consultancy Watt-Logic said.

It called on Ed Miliband, the Energy Secretary, to face up to the threat amid growing concern over UK power supplies, which still rely largely on gas despite the expansion of renewables.

“Without urgent action to secure dispatchable generation and stabilise the gas network, the UK faces escalating risks of supply shortfalls and widespread system failures well before 2030,” the report warns.

“It will be difficult to meet existing demand without rationing, let alone any additional demand from electrification.”

About a third of the UK’s electricity is generated by gas-fired power plants – but on windless days, this proportion can double.

Kathryn Porter, from Watt-Logic, warned that in five years time – just after the next general election – many of those gas plants could be offline and there are currently no plans to replace them.

She said a third of the fleet had been built in the 1990s and “while most received upgrades in the 2000s, in most cases this did not involve replacing rotors [a key component prone to wear]”.

“This means the anticipated retirement dates are becoming imminent and there is no replacement and minimal upgrade plans in place,” she added.

It means the risk of electricity rationing during the winter months will increase over the next five years – peaking between 2028 and 2031 – because of the loss in energy production.

The loss will be made worse by the planned shutdown of the UK’s ageing nuclear stations. Eight of the 10 remaining reactors face closure before or in 2030.

Full story here. 

We have been warning this would happen for years.

But still NESO and DESNZ continue to bury their heads in the sand and gaslight us:

Responding to the report, a Neso spokesman said: “Great Britain has one of the most secure energy systems in the world… our engineers are confident Britain’s grid will continue to operate safely and securely as more renewables connect to the network in the years ahead.”

A spokesperson for the Department for Energy Security and Net Zero said: “The National Energy System Operator,  has been clear the faster we decarbonise, the more secure we are.

“Gas will continue to play a key role in our energy system as we transition to clean, more secure, homegrown energy.

“That’s why we are also delivering the biggest upgrade to Great Britain’s electricity network in decades to deliver clean power by 2030 and beyond.”

Yes, we used to have “one of the most secure energy systems”, but we certainly have not now. As for more renewables making us more secure, NESO know this is untrue.

It was them who warned in their Clean Power 2030 report in 2024 that we would still need our full fleet of gas power stations for many years to come. They know full well that wind and solar power cannot supply all of the power we need day in, day out, even with contributions from nuclear, biomass and imports.

You can triple wind and solar power capacity, but three times nothing is still nothing.

Miliband knows that the real problems will start to kick in after the next election, so he will do his utmost to destroy the country before then, knowing he won’t have to face the consequences.

NESO FES Costings

According to NESO, that aiming for an 80pc reduction in carbon emissions by 2050, rather than the current “net zero” target, could save £14bn a year on average.

A hand holding a light bulb that contains a small plant and soil inside, symbolizing growth and sustainability.

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

 I ran with the Telegraph story earlier today, on the new report from NESO which calculated that delaying Net Zero could save £350bn.

This is the NESO document:

Cover of the NESO's FES 2025 Economics Annex document, featuring the title and publication date in a dark background with circular design elements.
https://www.neso.energy/publications/future-energy-scenarios-fes/fes-documents

According to NESO, that aiming for an 80pc reduction in carbon emissions by 2050, rather than the current “net zero” target, could save £14bn a year on average.

NESO have compared two of their scenarios – Holistic Transition (HT) and Falling Behind (FB). The first assumes we go flat out, changing the way we live, whereas the second assumes a slightly slower progress – as NESO note, this is NOT status quo:

Text excerpt discussing the Holistic Transition pathway for achieving net zero carbon emissions, detailing the roles of electrification, hydrogen, and consumer engagement.
Text excerpt discussing the NESO report and its implications on decarbonisation efforts and projected savings.

It begs the question, if going slow saves so much money, how much more would be saved by doing nothing? Sadly, NESO have not costed the latter! I wonder why.

Below is the Key Stats table from the Future Energy Scenarios, published during the summer, which NESO have now added costings to:

A detailed table displaying key statistics related to carbon emissions and electricity demand for the years 2024 and 2050, comparing multiple scenarios of energy transition.

As you can see, there is significantly less electrification on FB  -less capacity, less demand, more CO2.

Below is the key NESO graph from today’s report:

Graph comparing annualized total energy costs between Holistic Transition and Falling Behind scenarios from NESO report.

As the mauve line, Net Costs, indicates, the extra annualised cost increases year by year on HT compared to FB, until around 2045. Even then HT remains much more expensive.

Their costings are supposed to recognise all CAPEX and OPEX spend. So, for instance, CAPEX on wind farms, which are capital intensive, will increase the overall CAPEX element of total energy costs, but this is offset by reduced fuel costs – ie. buying gas.

As already noted, if less electrification, fewer renewables, fewer EVs and heat pumps lead to £350bn savings, how much could be saved by staying as we are?

At this point, I should make comment about some unrealistically optimistic assumptions made by NESO:

1) Offshore wind costs:

Bar chart illustrating the levelized costs of energy for various electricity generation options in 2035, including solar, wind, gas, and nuclear.

As the CCC did most recently, NESO have assumed impossibly low costs for offshore wind. According to the Data Workbook, their costs calculations are based on offshore wind costing £70.10/MWh for new projects. Incredibly these will fall even further to £53.20/MWh for wind farms built in 2035. (All costings in the NESO report are at 2025 prices)

This is Jackanory stuff and on its own makes the whole report pretty meaningless.

2) EVs

Again, in common with the CCC, they have assumed that EVs will be cheaper to buy than petrol after 2027:

A chart comparing the costs of the Holistic Transition and Falling Behind scenarios for carbon emissions reduction, highlighting economic implications.

This has no basis in reality – like for like, EVs still cost many thousands more than petrol.

It is also worth noting that NESO are forecasting a spend of £133bn on upgrading the electricity distribution network, on top of the £75bn already planned by OFGEM for the transmission grid. These upgrades are specifically connected to Net Zero objectives.

With OFGEM dishing out contracts with ROC of 7%, annual electricity bills will increase eventually by about £15bn.

I also take issue with this curious claim by NESO:

Graph depicting changes in investment and operational expenditure in the Holistic Transition pathway compared to 2025, showcasing CapEx, OpEx, and total expenditures in billions of pounds.

They say that CAPEX will be less in the 2040s than it is this year. They appear to assume that we won’t have to build any more wind and solar farms, battery storage, cars or heat pumps. as if they will miraculously last forever!

But the wind farms already operational will all need replacing long before 2050, as will heat pumps and EVs. So why is this cost not shown?

All of this means that we must ignore everything NESO have claimed about the 2040s, when they say that all the savings from Net Zero will miraculously start appearing.

So let’s examine what we do know:

  • Renewable energy remains more expensive than fossil fuels
  • Extra electricity grid costs – for upgrades, system balancing and storage – will add billions a year to electricity costs
  • Heat pumps are more expensive to buy and run than gas boilers
  • EVs are more expensive to purchase, with the extra cost more than outweighing savings on running costs.

No amount of dissembling by NESO can alter these basic facts.

We are already paying more than £20bn a year to finance the push to Net Zero. This cost will continue to rise.

It may be that at some time in the future, technology will appear that is cheaper and better than that which we currently have. Just maybe EVs will halve in price. Or nuclear power costs tumble.

If so, society will do as it always has – rush to adopt something which is better. It will need no incentives, no penalties, no coercion, no subsidies.

And it will be better off as a result.

Does AEP Think We Will Stop Using Oil & Gas?

AEP criticises Kemi Badenoch’s plan to maximise North Sea oil and gas. As I wrote yesterday, he offers no economic justification for his position. It is purely based on Net Zero dogma.

A man in a suit holds a megaphone in a dilapidated urban setting with a large banner reading 'NETZOZO' in the background.

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

A headline from an article discussing the future of the North Sea, emphasizing a shift away from oil and gas.
https://www.telegraph.co.uk/business/2025/09/02/north-sea-great-future-kemi-wont-be-oil-and-gas/

AEP criticises Kemi Badenoch’s plan to maximise North Sea oil and gas. As I wrote yesterday, he offers no economic justification for his position. It is purely based on Net Zero dogma.

Instead, he thinks we can rely on wind power and that oil and gas will soon be dead end technologies anyway.

Clearly, he has not read NESO’s Future Energy Scenarios, published a couple of months ago:

A young woman wearing safety goggles and gloves works with machinery in an industrial setting, focused on her task. The background shows a production area with various equipment.
https://www.neso.energy/publications/future-energy-scenarios-fes

According to NESO, the UK will still be using nearly as much natural gas in ten years’ time as we are now –between 71% and 80%, depending on scenario.

Even by 2040, we will still be using at least half as much. And if we go for the hydrogen scenario in a big way, gas consumption will barely fall at all.

Graph showing the Natural Gas Summary with selected options over time from 2023 to 2049, illustrating various scenarios including Hydrogen Evolution, Electric Engagement, Holistic Transition, Ten Year Forecast, and Falling Behind.

Demand for petrol and diesel for transport will also remain strong for at least the next ten years. And the FES does not even look at non-transport use of oil products, which account for nearly half of UK consumption.

Line graph showing projected road transport energy demand (ED5) from 2023 to 2049, with a decreasing trend in TWh for electric engagement.

So where does AEP suggest we get all of this oil and gas?

£80 Billion Needed For Grid Upgrades In Next Five Years

OFGEM have just announced the first tranche of investment in Britain’s grid upgrades needed to hit 2030 renewable targets.

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

OFGEM have just announced the first tranche of investment in Britain’s grid upgrades needed to hit 2030 renewable targets.

Ofgem has today (1 July) given the provisional green light to an initial £24bn investment programme to enhance energy security while enabling the transmission of more clean energy from renewable sources. 

Over £15bn will ensure the continued safe operation of Great Britain’s gas transmission and distribution networks, making sure they deliver safe and secure supplies of gas to households and businesses across the UK. 

An initial £8.9bn investment is being committed to Britain’s high-voltage electricity network, with a further £1.3bn ready to go – to power the biggest expansion of the electricity grid since the 1960s. The draft settlement is the first step in an estimated £80bn investment programme boosting electricity network capacity, protecting UK households from the volatile international gas markets that caused the massive fluctuations in energy bills in recent years. 

The investment in our grid, which will rise to around four times the current spending levels, will allow for 80 transmission projects and all associated works right across the country to be completed within five years. This will significantly increase the grid’s capacity, through new power lines, substations and other technologies, to handle the flow of electricity from new renewable sources. 

These projects, which are also vital for driving growth, will upgrade over 4400km of overhead lines and deliver 3500km of new circuits, including investments offshore, doubling the total build in the last 10 years. It means up to 126 GW of clean power generation will be connected to the grid by 2030 alongside additional flexible storage and technologies, enough to power millions of households with clean, stable and secure energy. 

Ofgem CEO Jonathan Brearley said:

“Britain’s reliance on imported gas has left us at the mercy of volatile international gas prices which during the energy crisis would have caused bills to rise as high as £4000 for an average household without government support. Even today the price cap can move up or down by hundreds of pounds with little we can do about it. 

“This record investment will deliver a homegrown energy system that is better for Britain and better for customers. It will ensure the system has greater resilience against shocks from volatile gas prices we don’t control. 

“These 80 projects are a long-term insurance policy against threats to Britain’s energy security and the instability of prices. By bringing online dozens of homegrown, renewable generation sites and modernising our energy system to the one we will need in the future we can boost growth and give ourselves more control over prices too. 

“Doing nothing is not an option and will cost consumers more – this is critical national infrastructure. The sooner we build the network we need, and invest to strengthen our resilience, the lower the cost for bill payers will be in the future. 

This critical investment covering upgrade and expansion of the electricity grid, maintenance and also gas depreciation in its entirety is estimated to increase network charges on bills by £104 by 2031. This includes £30 for the gas networks and £74 for the electricity grid. 

Around half of this investment, including £30 on gas networks, is needed for the gas and electricity grids to maintain safety, resilience, and reliability. 

The remainder, around £52, will be used to expand the capacity of the electricity grid to deal with the rising demands of a more electrified energy system, as we move away from gas. 

This investment (£52) alone is expected to lead to around £80 of savings for consumers by 2031 compared to not investing by reducing constraint costs (money paid to wind farms to switch off because the grid is unable to transmit their power output) and making better use of our clean renewable energy so we are not having to pay for expensive gas plants to serve demand. So bills are expected to be around £30 lower than they would have been had this investment in upgrading and expanding the electricity network not been made. 

Taken all together the net cost of these investments on bills amounts to around £24 a year, or less than 40p per week, by March 2031, although this does not take into account the overall benefits of reaching clean power that can reduce bills. 

The £30 increase in gas network charges on bills by 2031 would be necessary in all scenarios in order to maintain safety, resilience, and reliability in our gas networks. 

https://www.ofgem.gov.uk/press-release/ofgem-approves-initial-ps24-billion-operate-and-maintain-critical-gas-networks-and-upgrade-britains-electricity-supergrid

OFGEM say household electricity bills will rise by £74 a year, as a result of this £80 billion upgrade. That equated to £6.6 billion a year, given that non residential consumers use about 60% of total electricity. OFGEM say they are assuming return on capital of 6%, which implies depreciation costs of 2.5% over 40 years.

£6.6 billion works out at about £22/MWh, four times  NESO’s projection of just £5/MWh, which also includes constraint costs.

https://notalotofpeopleknowthat.wordpress.com/2024/12/13/milibands-300-energy-saving-is-smoke-mirrors/

But extraordinarily, the NESO Clean Power 2030 Report did not take grid upgrade costs into account. The report states:

Neither is there any costings for the upgrading of local distribution networks.

The figure it offer for “Grid expansion and constraint costs” only reflects the increase in constraint costs from £2.8 bn to £3.7 bn a year.

To the £80 billion mentioned, we can another £16 billion already spent or committed to by the National Grid between 2021 and 2026.

But the spending won’t stop in 2030. OFGEM note these current plans will cater for 126 GW of “clean” power, in line with NESO’s plans. But buildout of renewables will still need pursued rapidly.

The BBC reported a year ago that another £58bn is for work needed between 2030 and 2035.

Add the lot up and you are looking at £154 billion, which will add £13 billion to our bills each year. None of this expenditure would be needed without the expansion of renewable energy and the increased demand for electricity necessitated by Net Zero.

In true Orwellian double speak, OFGEM’s Jonathan Brearley tells us that spending £100 billions of your money will make you better off!