Ed Miliband’s Net Zero drive will ‘definitely not’ cut energy bills for customers, the boss of British Gas’ owner has warned.
Chris O’Shea, chief executive of Centrica, said he was ‘frustrated’ at the ‘misinformation’ that renewable energy will bring down costs for households.
His comments come as a major blow to Mr Miliband – Labour’s Energy and Net Zero Secretary – and raised questions over the Government’s pre-election pledge to slash £300 off bills by 2030.
In a post on social media platform LinkedIn, Mr O’Shea said: ‘The build-out of renewables will not materially reduce UK electricity prices from current levels. They may give price stability and avoid future price strikes… but will definitely not reduce the price.
‘I fully support the move to a cleaner energy system. I am simply very frustrated that people peddle misinformation at best, and disinformation at worst.’
Mr O’Shea’s argument was based on his analysis of wholesale energy prices and the ‘strike price’ agreed with renewable energy providers via government-run auctions.
The “Contracts for Difference” (CfD) auctions were launched in 2015 to ensure expensive green energy projects are built.
Developers bid to secure a guaranteed rate that their project will be paid for every megawatt hour (MWh) of energy it produces.
If the price of electricity on the open market dips below that, subsidies kick in to top up payments to companies which are then recouped through customer bills.
Mr O’Shea compared the average wholesale energy price set by gas – £82.11 over the last year – with the latest CfD prices.
Fixed offshore wind projects rose to £82.16 per MWh in last year’s auction, while solar generators and onshore wind farms sat at £69.87 and £71.03, respectively – not cheap enough to significantly reduce consumer bills.
A Government spokesman said: ‘We are making the UK a clean energy superpower to get off the rollercoaster of fossil fuel markets controlled by dictators.’