Another very large dose of propaganda was delivered this week, and more lies from Mr Miliband. [some emphasis, links added]
He and his Department for Energy Security and Net Zero (DESNZ) announced a ‘record-breaking auction for offshore wind’, claiming ‘to take back control of Britain’s energy’, in what must go down as one of the most blatantly dishonest, arguably fraudulent government press releases in recent years.
It claims that a ‘record 8.4 GW of offshore wind in Europe’s biggest ever offshore wind auction’ has been secured. You read the full content of the press release along with my analysis, illustrative graphs, and workings here.
In brief, it contains three big lies.
The first is that the DESNZ’s claim that offshore wind is 40 percent cheaper than gas implies a cost of gas power of about £150/MWh. That is a fake claim, even if you allow for carbon costs.
The simple reality is that the real cost of new gas power would be £68/MWh, a quarter less than these new contracts for offshore wind. Of this, fuel costs account for £45/MWh.
The second lie concerns the use of ‘2024 prices’, on which the ‘90.91/MWh’ price is based. It has probably occurred to you that we are now in 2026.
Since 2024, the consumer price index has risen by 4.5 percent. As the contract for difference (CfD) strike prices are index-linked, that ‘£90.91’ has already risen to about £95/MWh.
The wholesale price in Q4 2025 was £74.44/MWh, according to the Low Carbon Contracts Company. Offshore wind will therefore be subsidised to the tune of £20/MWh at these prices.
Indeed, DESNZ admits as much, because the AR7 published results confirm that subsidies could top £1.9 billion a year by the time all the schemes are operational. These subsidies will have to be paid for 20 years and are index-linked.
Then comes the third big lie.
DESNZ is comparing new offshore wind with new Combined Cycle Gas Turbine (CCGT). The true comparison should be with existing CCGT, as we already have under-utilised CCGTs. It is generated from these that new wind power will replace.
As we have already paid for all of the fixed costs anyway, the only cost of producing additional electricity at CCGTs is the fuel cost, which, as we have seen, is around £45/MWh.
That means the cost of sourcing power from these new wind farms will be about £50/MWh dearer than the gas power they are replacing.
We are tight on CCGT capacity and will need to construct new plants if older ones close as expected. But – crucially – we will have to do that anyway, whether we build new wind farms or not.
What Miliband wants is to spend tens of billions building offshore wind farms in addition to paying for that new gas capacity. It will not ‘lower bills for good’, as the DESNZ blurb states: it will raise bills yet further.
Blackouts by 2030
Meanwhile, Mr Miliband and DESNZ remain oblivious to the serious risks that face both the electricity and gas grids in the UK.
On Tuesday, independent energy consultant Kathryn Porter released a devastating report for the Global Warming Policy Foundation, warning that:
- The electrification of heating, transport, and industry could add between 7 and 10 GW of electricity demand by 2030, data centers an additional 6 GW, and the government targets around 15 GW of new demand.
- Yet by 2030, 12-17 GW of reliable gas and nuclear power generation could be shut down, while replacing these takes years to get approval and subsequently build.
- Wind and solar power sources remain intermittent. Power levels are highest on cold, still nights when these power sources aren’t generating.
- There is a 65-85 percent probability of regional electricity rationing or blackouts by 2030 and a baseline risk of 5-10 percent of one of these cascading into a full grid failure.
- Investing in life extensions for current gas generation is the safest strategy to avoid blackouts.
- The grid can be secured only with greater investment into constant power sources, such as a significant extension of new gas-fired power generation capacity.
- The declining output of oil and gas in the North Sea means that some pipelines may become unviable. We could see cliff-edge reductions in gas coming onto the British grid, meaning we don’t have enough gas to meet demand on cold winter days.
Porter says that Britain’s electrification targets are politically ambitious but economically and operationally unsustainable.
Without urgent action to secure affordable electricity, accelerate grid upgrades, and invest in new dispatchable generation (especially gas), most electrification targets will be missed, and security-of-supply risks will rise well before 2030.
You can read ‘Electrification – can the grid cope?’ here.
Read full post at TCW
