Labour’s plan to decarbonise the grid by 2030 is ‘infeasible’, report finds

Labour’s £116bn plan to decarbonise the power sector by 2030 is “infeasible in the timeframe”, the Policy Exchange think tank has said.

The body commissioned Aurora Energy Research to conduct a rigorous analysis of different scenarios in which the UK could achieve a net zero power sector.

If it wins the next election, the Labour Party has announced plans to accelerate the UK’s efforts to make its power grid net zero from 2035 to 2030. It said the plan would ultimately cut household energy bills by up to £1,400 a year and improve insulation for millions of homes.

But the new report argues that decarbonising the grid by 2030 is a “fundamentally different proposition” to decarbonising the grid by 2035. The shorter timeframe does not allow additional generation from nuclear or bioenergy with carbon capture and storage to be brought on line to meet the target. 

This would put more of an onus on accelerating renewable capacity and battery storage to unrealistic levels by 2030 and a higher carbon price would also be required to drive out unabated gas.

For Labour’s 2030 plan, Aurora concludes that “the extremely rapid and concurrent overhaul of the power system components would require a policy, planning and investment shift that is infeasible in the timeframe, and is unlikely to be supportable by existing supply chains and workforce skills.”

In 2022, the amount of new low-carbon investment in 2022 in the UK from the public and private sectors already, totalled £23bn. Both the 2030 and 2035 net zero scenarios require a major increase in the annual level of investment.

But it is estimated that the 2030 date requires an additional £15.6bn a year until 2030 (a total of £93.5b) versus just £8.2bn a year until 2030 under the later scenario.

The report said that the increase in funds would be “extremely challenging” to deliver in this timescale.

Even if the funding were available, the rate of deployment would need to reach levels that are highly unlikely to materialise. “Given lead times, skills shortages and supply chain constraints, the interventions needed for NZ 30 are likely impossible by 2030,” Aurora said.

This is because of the difficulty in raising debt or equity to finance projects in this timescale. While supply chains for steel, glass, lead, copper and aluminium would need to scale up by 250-400% at a time when they are increasingly constrained due to geopolitical instability and rising global demand.

Constraints relating to planning and consenting are also thought to be a major barrier to delivering the 2030 goal. Lengthy planning processes mean a typical offshore wind project takes over 10 years from conception to becoming operational. With only six years remaining until 2030, this severely limits the amount of new capacity that could be added within that scenario.

Nevertheless, the research finds that even the later 2035 date would require “a marked increase” in the rate at which these technologies have been brought online to date although this could be achieved if the right policies are implemented.