Tony Blair's Think Tank Demands Overhaul of Labour's Green Energy Strategy
In a significant intervention, Sir Tony Blair's think tank, the Tony Blair Institute (TBI), has issued a stark call for Labour to abandon Ed Miliband's green energy strategy in favour of a drive for cheaper power. The damning report argues that the current approach risks undermining Britain's global standing and economic competitiveness.
Critique of Current Energy Policy
The TBI report contends that Labour's strategy of maximising wind and solar energy is excessively costly and could prove detrimental to the nation's industrial base. It states emphatically that a policy which "raises electricity prices, hollows out industry and undermines competitiveness will not endure – and it will not be emulated." The think tank further criticises the focus on decarbonisation targets as "climate theatre" rather than genuine climate leadership, noting the UK contributes less than 1% of global emissions.
Proposed Shift to 'Cheaper Power 2030'
The report urges Energy Secretary Ed Miliband to replace the 'Clean Power 2030' mission with a new 'Cheaper Power 2030' objective. It highlights that the UK paid £1.5 billion last year in balancing costs, which involve switching off wind farms during surplus wind and activating gas plants during shortages. While maintaining the Net Zero 2050 goal, the TBI asserts that pursuing cheaper energy would facilitate achieving this target more effectively.
Economic and Strategic Imperatives
Cheap power is portrayed as essential not only for decarbonisation but also for supporting data centres, embracing artificial intelligence, and securing the UK's future technological advancement. The report notes that offshore wind costs have risen "materially" due to inflation, higher interest rates, and global competition for components. It warns that adding more clean energy to the grid could paradoxically increase costs.
The think tank emphasises that affordable energy has become a determinant of hard power, citing the United States and China's focus on energy production. "Against this backdrop, the UK's energy strategy of fixating on delivery against a single decarbonisation target looks unduly limited," the report adds. "Decline is not a climate strategy – and a weaker Britain will not be a more effective climate actor."
Specific Policy Recommendations
- End the windfall tax on oil and gas firms, currently set at 38%, introduced in May 2022 after profits surged following Russia's invasion of Ukraine.
- Reverse the ban on new licences for North Sea drilling, arguing that North Sea oil could still produce 7.5 billion barrels, adding £165 billion to the economy.
- Note that even in ambitious net zero scenarios, oil and gas will remain necessary beyond 2050.
The report cautions that paying higher prices for wind power risks locking the UK into elevated costs even if gas prices decline. Industry figures have criticised the windfall tax, claiming it stifles investment and leads to job losses, prompting a government consultation on potential replacements.
Expert Commentary and Government Response
Tone Langengen, TBI's Energy Policy Advisor and author of the paper, stated: "A reset in Britain's energy policy is the most effective contribution the UK can make to tackling climate change. At the moment, its narrow focus on whether power is clean means the system has lost sight of whether it is cheap, secure, and capable of powering a modern economy." She added that policy should be measured by outcomes like abundant, affordable electricity that sustains growth and maintains public consent for climate action.
In response, a spokesperson for the Department for Energy Security and Net Zero (DESNZ) defended the clean power mission: "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, and are not in the interest of the British people. The route to energy sovereignty, lower bills and thousands of good jobs in our communities is becoming a clean energy superpower."
