Would Labour’s net zero plans cut energy bills by £300?

The Labour party has claimed its energy plans would save families “up to £300” on their energy bills from 2030.

This claim is based on a report by the energy think tank Ember, which estimated that under a scenario in which the UK met its renewable energy commitments, the average household electricity bill would be around £300 lower in 2030 than in 2023.

However, the £300 figure is based on the level of the energy price cap in July-September 2023. The price cap has since decreased (though is forecast to increase again later this year).

How the figure was calculated

Ember’s report, which was published in October 2023, states that if the UK government delivered on its renewables commitments, and met the National Grid Electricity System Operator (ESO)’s most ambitious scenario for energy decarbonisation it would reach 98% clean electricity generation by 2030.

The report estimates that under this scenario the average household electricity bill would be £828 per year. It compared this figure to the average annual household electricity bill in Great Britain (on a single-rate metering arrangement, including VAT) under the July-September 2023 energy price cap (£1,126.84), to get a saving of approximately £298.

Since the report was published the energy price cap has decreased, with the average household electricity bill in Great Britain currently £978.83. 

Phil MacDonald, Ember’s managing director, told Full Fact: “Electricity bills have fallen since the modelling was published, but this is likely temporary since the price cap is predicted to rise again by almost £200 in October.

“It isn’t possible to compare the results of Ember’s modelling from last year to current prices and draw conclusions from that, as the model would have to be rerun with updates to all the different factors feeding into it.”

It’s also worth noting that whereas Labour has been referring to energy bills (which include both electricity and gas), these figures only give us information on electricity bills.

We’ve contacted Labour for comment and will update this article if we receive a response.

The figure isn’t an estimate of impact of Labour’s plans

Labour’s plan focuses on achieving a Net Zero power grid by 2030—which is a more ambitious timeframe than that set out by the National Grid ESO (2034) or the government’s current target for decarbonising the electricity system (2035). The £300 figure is therefore not a direct assessment of the impact of Labour’s plans, but an estimate of the impact of a different, less ambitious scenario than Labour is proposing.

Research conducted by energy research firm Aurora, which looks specifically at the targets set by Labour and the Conservatives, found that achieving a net zero power grid by 2030 (Labour’s target) would result in cheaper energy compared to not reaching the target until 2035 (the Conservatives’ target).

In 2020, the National Grid ESO estimated that achieving its most ambitious scenario would cost a net £2.82 trillion (based on 2020 prices). It’s worth noting though that this is actually forecast to be slightly cheaper than a scenario in which the UK misses its Net Zero targets, and National Grid ESO says annual spend “is similar in all years between 2020 and 2050 across the majority of scenarios”.

Ember told us its £300 figure “accounts for increased network costs, which are outweighed by savings from the wholesale cost decrease from cheaper power generation from renewables”.

Labour says it would invest an additional £23.7 billion on environmental schemes over its first term in office to achieve its energy policies (including clean power by 2030), and that this would be funded by a windfall tax on oil and gas giants, and borrowing.

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