There is a £200 billion “carbon bombshell” lurking at the heart of Labour’s election manifesto  according to today’s Daily Telegraph. Its promise to decarbonise the power sector by 2030 could “wreak havoc with the UK’s finances”, according to a  second article in the same paper.

The stories centre on Labour’s  manifesto promise to set a decarbonisation target for UK electricity, in line with the  recommendations of the Committee on Climate Change (CCC). Labour would mandate a reduction from the 450 grammes of carbon dioxide emitted per megawatt hour of electricity generated today, to between 50 and 100 grammes in 2030.

The Telegraph analysis rests on a series of shaky assumptions. More significantly, however, it is flawed because it ignores the cost of the alternatives. Carbon Brief takes you through the details.

Flawed assumptions

The Telegraph says its £200 billion figure for the cost of a decarbonisation target is based on “educated guesses at best”. Here are some of the trivially incorrect assumptions it makes.

The Telegraph says wholesale electricity prices will rise from around £40 per megawatt hour today to £55 in 2030. The paper does not explain how it arrived at this figure.  DECC’s central projection is £73, which would make top-up subsidies for low-carbon energy sources relatively cheaper.  National Grid scenarios cover a range of £50 to £100 per megawatt hour in 2030. Future prices are  highly uncertain.

Next, the Telegraph assumes that Labour aim for zero-carbon electricity in 2030 because its manifesto talks of “removing carbon” from electricity supplies. However, on a BBC Daily Politics debate on 20 April Caroline Flint, Labour’s energy and climate change shadow, said the target would be in line with CCC advice. This would aim for 50-100gCO2 per megawatt hour.

The Telegraph then assumes, without offering any justification, that half of the UK’s zero-carbon power in 2030 would be nuclear, up from  19% last year. It estimates the cost as the same as for building a  new nuclear plant at Hinkley Point C in Somerset. The government says new nuclear plants will become cheaper through the 2020s, though nuclear has a  poor record on cost.

The Telegraph estimates the additional cost of nuclear electricity as the capital cost of building new reactors. It ignores the costs of generating power from other sources if nuclear plants are not built, for instance, the capital cost of new gas plant and the cost of gas to fuel them.

The Telegraph takes a completely different approach for renewables, where it uses the additional cost of subsidies on top of wholesale electricity prices. Without explanation, it assumes that onshore wind, offshore wind and solar will each generate one-sixth of the UK’s electricity in 2030 and that costs will remain constant at 2014 levels.

In February, DECC signed contracts for renewable electricity that were already significantly below those assumed by the Telegraph to continue out to 2030. Most analysts expect costs to fall further. The Telegraph says wind turbine costs have increased, but this is contradicted by its own source.

Carbon capture and storage (CCS) is, in its own words, “ignored” by the Telegraph analysis. It says CCS remains “unproven”, though it concedes there are CCS plants operating around the world. The CCC expects coal or gas CCS to supply a substantial chunk of UK electricity needs in 2030, roughly between an eighth and a fifth of total generation, as the chart below shows.

The Telegraph scenario for electricity generation in 2030 can be compared to decarbonisation pathways from the CCC. The chart below shows a range of CCC scenarios meeting a 50gCO2 per megawatt hour target in 2030. The Telegraph scenario would be effectively zero carbon.

Shares of electricity generation in 2030 under decarbonisation scenarios from the CCC, on the left and from the Telegraph on the right. Note that the Telegraph’s green area is solar only and does not include biomass. Source: CCC Fourth Carbon Budget Review and the Telegraph. Modified chart by Carbon Brief.

The Telegraph assumes far more nuclear will be built and, unlike the CCC or DECC, it does not expect biomass, gas or CCS to be part of the mix.

Official estimates for decarbonisation costs

So, what will it actually cost the UK to decarbonise its electricity supplies by 2030, meeting the CCC’s recommended 50-100gCO2/kWh target?

The CCC says:

“We estimate that the total capital costs of scenarios reaching around 50gCO2/kWh by 2030 could be up to £200 billion between 2014 and 2030.”

Despite all the questionable assumptions made by the Telegraph this appears at first glance to be a similar figure. However, the CCC also estimates the benefits of spending this money compared to the alternative of relying on gas.

It says decarbonising the power sector by 2030 would be worth £25-40 billion to the UK economy, net of costs, with the figure possibly rising to more than £100 billion if gas and carbon prices increase more than expected.

The CCC thinks a decarbonisation target can be met for an additional £15 per year on the average household energy bill in 2030. It says this spending would put the UK on a path to falling electricity prices after 2030, whereas prices would continue to rise if we rely on gas. That’s in part because renewable sources generate very cheap power once they’re built.

Ignoring the cost of the alternatives

The Telegraph analysis includes a range of flawed assumptions. It’s tempting to put this down to electioneering, with the Conservative-supporting Telegraph looking for ways to discredit Labour. However, its analysis comes from a long line of similar arguments against UK action to tackle climate change and it’s worth considering them in the round.

Newspapers, thinktanks and politicians frequently claim to have discovered a way to save money or avoid costs in the UK’s power sector. These claims should not be taken seriously unless they explicitly set out their alternatives, including any costs. A frequent unspoken assumption is that the UK can ignore its legally-binding commitments on climate change.

It is generally accepted that meeting the UK’s goal of cutting emissions in 2050 by 80% of 1990 levels will cost money. Even if these costs are outweighed by the benefits, as some argue, the costs will be real.

However, the CCC says a nearly decarbonised power sector in 2030 is “a key part of the cost-effective path” towards the UK’s long-term carbon targets. In other words, other ways of meeting UK climate commitments would be more expensive.

The Telegraph says it would cost the UK “more than £200 billion” to decarbonise the power sector by 2030. The analysis behind this figure is shaky, as we have seen, and a chunk of spending on low-carbon electricity out to 2020 has already been committed in advance by the coalition government. But, more importantly, the Telegraph ignores the cost of the alternatives.

The UK could meet its climate targets without power sector decarbonisation, by making greater efforts in other parts of the economy, such as transport or industry. Or it could ignore the UK’s climate targets entirely. The Conservatives, Liberal Democrats and Labour have all pledged to uphold the UK’s carbon targets. Only UKIP is in favour of scrapping them.

The Telegraph article should either explain how climate targets can be met more cheaply without power sector decarbonisation, or it should admit that it is in favour of tearing up the Climate Change Act. Its latest analysis does neither.