Rethinking the Unaffordable

In 2009, Ofgem carried out Project Discovery to simulate energy market scenarios that explored the various prospects for achieving secure and sustainable energy supplies over the next 10-15 years. The favoured ‘GreenTransition’ scenario put the estimated cost of delivering the necessary infrastructure at £199 billion. This is, clearly, a massive sum. To put it into perspective, it is roughly equivalent to funding 21 Olympic Games, building 33 new Queen Elizabeth aircraft carriers and clearing the entire UK budget deficit, corporation tax and stamp taxes for one year. Given our current era of austerity, and increased energy prices, it is imperative that this expenditure be subject to real scrutiny by both the public and energy authorities. Moreover, Ofgem’s cost estimates were based on pre-recession market conditions and contained a number of assumptions around the growth and development of global energy markets. All would agree that the world has changed since then.

This paper offers a review of the underlying assumptions of the GreenTransition plan, with a particular focus on three main areas:

1. The true financial cost and efficiency;
2. The principles of the Green Transition Plan; and
3. The likely impact on the economy.

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