Tony Blair’s thinktank has accused Ed Miliband of driving up energy prices in his push to make Britain’s energy supply more environmentally friendly.
The Tony Blair Institute (TBI) published a report on Friday criticising the government’s green policies and urging the energy secretary to drop some of them altogether, including almost completely decarbonising the electricity system by 2030.
The report feeds into growing criticism from the right about the way the government is pursuing its decarbonisation goal and deepens the antagonism between the two former Labour leaders over climate policy.
The report, written by the institute’s senior energy policy adviser, Tone Langengen, and endorsed by Blair, says: “If Clean Power 2030 was ever fit for purpose, that is no longer the case: the world has changed economically, technologically and geopolitically.
“The UK’s energy framework has not adapted to these new circumstances and as a result, policy is drifting away from the fundamentals it must serve.”
A Labour source said in response: “The mainstream, centre-ground position, backed by the economics and British business, is that getting off expensive fossil fuel markets controlled by petrostates and dictators and on to clean homegrown power is the right choice for Britain.”
Miliband is under pressure to cut energy bills, having promised before the election to bring them down by £300 on average. This week Chris O’Shea, the chief executive of Centrica, said the price of electricity would be higher in 2030 than it was at the peak of the Russian invasion of Ukraine.
Blair has criticised the government’s energy policies before, claiming last year that the push to phase out fossil fuels was “doomed to fail” and that the climate debate was “riven with irrationality”.
Blair, whose thinktank works for the governments of petrostates including Saudi Arabia, says the government is pushing up energy prices by pursuing firm targets for commissioning clean power regardless of how much it costs.
Similar arguments have been made by the Conservatives and Reform UK, who have promised to drop the UK’s central climate commitments should they come to power. The TBI says it supports the government’s ambition to hit net zero by 2050.
Last month the government commissioned 8.4GW of offshore wind, which it said put it on track to meet the 2030 target, at an average price of £60.25 per megawatt-hour (MWh) – a 50% rise on the prices paid in 2019.
Ministers say the price compares favourably with what it would cost to commission new gas power, but the TBI report says that gas prices are unusually high because of the war in Ukraine and will fall over the longer term.
The government, however, says that gas prices are likely to stay high because of geopolitical uncertainty.
A spokesperson for the energy department said: “Our clean power mission is the only way to bring down bills for good. The alternatives leave Britain dependent on petrostates and dictators whose control of fossil fuel markets helped drive the cost of living crisis, and are not in the interest of the British people.
“The route to energy sovereignty, lower bills and thousands of good jobs in our communities is becoming a clean energy superpower.”
The TBI also says the government should do more to encourage drilling in the North Sea, including dropping the windfall tax on oil and gas companies.
The report says: “In a world of rising energy demand, tighter public finances and intense geopolitical competition, the UK cannot afford to treat domestic production as a moral signal rather than a strategic asset.”
Blair says he is driven by a desire to help cash-strapped consumers and to make sure the UK commissions enough electricity generation to provide for the artificial intelligence revolution. His critics argue he is motivated by driving money towards his institute, which does not make a profit but does give the prime minister access to world leaders.
As well as its work with Saudi Arabia, the institute takes tens of millions of pounds in donations each year from Larry Ellison, the co-founder of the technology company Oracle, which is making a major push into AI software.
A spokesperson for the TBI said: “Our work on net zero and energy is grounded in one principle: policies must reflect the real world.
“Claims that our analysis is shaped by the fact we work in energy-producing countries are false. They avoid engaging with the substance of the argument, which is based on data and global trends.”