Net Zero costs could exceed £9trillion as critics fume: 'It was sold to the public on fantasy numbers!'

Gross expenditure could surpass £7.6trillion, rising above £9trillion once wider carbon‑related costs are included.

The Institute of Economic Affairs (IEA) briefing paper, authored by energy analyst David Turver, argues public bodies have relied on what he describes as “fantasy assumptions” that significantly understate the scale of spending required.

William Clouston, leader of the Social Democratic Party (SDP), told GB News Ed Miliband’s latest offshore wind auction “could add up to £1.8billion a year to bills for two decades.

“This Government is characterised by its dishonesty and inconsistency," he said. "His delusions, sought in the interest of self‑righteousness, have come at the expense of our prosperity."

The Climate Change Committee has revised down its estimate of the net cost of Net Zero to £108billion between 2025 and 2050, compared with earlier projections exceeding £1trillion.

According to the IEA paper, this reduction reflects methodological changes and optimistic forecasts for renewable energy, heat pumps and electric vehicles rather than genuine savings.

The analysis highlights gaps between official projections and recent project costs.

The Committee estimates offshore wind capacity costs of £1,500 per kilowatt for projects due to deliver in 2030.

However, Hornsea 3, expected online in 2028, has a projected cost of around £11billion for 2.9GW of capacity, equating to around £3,682 per kilowatt.

Solar costs show similar discrepancies, with recent projects at Stokeford and Alfreton reportedly costing £952 and £995 per kilowatt, compared with the Committee’s 2025 projection of £564.

Mr Clouston said the structure of the new offshore wind contracts, index‑linked to inflation and priced above current wholesale electricity costs, risked prioritising developers over consumers.

“They have enriched giant corporations at the expense of hard‑working British people,” he said.

“It is evident that Labour has left its roots and instead has turned toward rather flaky vanity projects.”

He also questioned the credibility of Labour's timetable, after average bills rose by £200 despite a pledge to cut them by £300.

“Renewables simply don’t have the power at present to be anything other than supplementary. The current timetable for Net Zero is deeply naïve,” he said.

The IEA further questions assumptions about borrowing costs, pointing out that projected capital costs for solar and onshore wind sit below current 30‑year gilt yields of around 5.3 per cent.

Richard Tice, deputy leader of Reform UK, said the report “exposes the myths and lies we have been told by various public bodies”, arguing the total expense would amount to “many trillions of pounds” and harm industry through higher pricing.

Andy Mayer, an energy analyst at the Institute of Economic Affairs, said the paper “cuts through the fog surrounding net zero costs”, arguing that “wildly optimistic assumptions and creative accounting have obscured serious economic scrutiny”.

Mr Clouston said Miliband’s wider approach risked deepening structural imbalances in the energy system.

“They have throttled oil and gas before building a reliable alternative supply — such as a new nuclear fleet,” he said.

“It has led to an unbalanced and costly energy regime in the UK without materially impacting global warming.”

He added grid constraints were already undermining renewable output.

“The wrong type of generation capacity in the wrong place is now a huge problem.

"We have substantial renewable facilities lying idle in the north of Scotland because the grid can’t absorb what they intermittently produce.”

Claire Coutinho, the Shadow Energy Secretary and former Energy Secretary, said she had struggled to obtain precise costings for wind and solar projects while in office, adding: “It beggars belief that none of our ‘independent’ energy bodies can publish an accurate figure for what Net Zero is going to cost this country.”

Mr Clouston said public support for net zero had eroded as bills rose, arguing that stabilising the grid should come before further decarbonisation.

He said his party favoured a short‑ to medium‑term expansion of gas and coal generation before moving to “a national nuclear renaissance”.

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