The costs of upgrading Britain’s energy grid for net zero threaten to spiral out of control, EDF has warned.
The French energy company, which operates the UK’s nuclear fleet, said a £70bn programme to modernise the grid faced a tripling in construction costs, far outstripping initial forecasts.
The energy supplier warned the companies charged with operating the UK’s high-voltage transmission system have been hit by surging inflation and lengthy procurement delays.
Rising prices mean that Labour’s target to decarbonise by the end of the decade – under the Clean Power 2030 plan devised by Ed Miliband, the former energy secretary – could cost billions more than expected, much of which will be passed on to households through higher bills.
The warning comes after Miatta Fahnbulleh, the new Energy Secretary, suggested this month that she could slow down the timetable of the power pledge in a drive to bring down living costs.
Officials previously estimated that upgrading the grid would cost at least £70bn over the next five years, with the levies added to average annual power bills set to climb from £44 to £105.
EDF’s warning implies the final amount could be higher still.
The companies responsible for the “great grid upgrade” are National Grid, which operates the transmission grid in England and Wales, along with Scottish Power and SSE in northern Scotland.
The improvements are needed to connect new wind farms, improve old power lines and ready the grid for soaring electricity demand from technologies such as heat pumps and electric cars.
EDF said it supported upgrading the network but warned that the 2030 scheme was now so expensive the whole project should be re-examined.
Josh Buckland, EDF’s policy director, and Matthew Ball, its grid manager, warned in a blog post: “We estimate costs have risen two to three times since initial transmission operator forecasts – based on analysis of Ofgem’s own documents.”
They added: “Connections are subject to increasingly severe delays. Our own projects are suffering an average connection delay of two years, with the worst now over five years.”
Simon Gallagher, the managing director of UK Networks Services, which manages grid connections for businesses, said that Clean Power 2030 is “not achievable as currently designed”.
He added: “Those who support its aims, including us, believe the plans are too fast and too expensive.”
The rising costs of the net zero upgrade have become increasingly politically controversial.
Claire Coutinho, the shadow energy secretary, said: “Labour’s dash to net zero has a huge hidden price tag attached to it.”
Richard Tice, Reform UK’s energy spokesman, said EDF had “blown the lid on the rising costs of net zero projects”.
EDF said the transmission operators’ current £70bn of planned spend equated to £1,000 per UK citizen. It called on Ofgem, the government energy regulator, and the National Energy System Operator to improve transparency.
EDF’s warning coincided with a government decision to approve another substantial solar farm on prime Lincolnshire farmland.
The Beacon Fen solar farm triggered controversy owing to the fact that it is spread across 1,300 acres of top-quality farmland.
Ms Fahnbulleh confirmed the project’s approval on Friday.
However, Sean Matthews, the Reform leader of Lincolnshire county council, said he would be seeking a Judicial Review of the decision.
He said: “We are becoming a dumping ground for solar, which is also destroying top quality farmland.”
Mike Rutgers, of Low Carbon, the developer of the solar farm, said: “Projects like Beacon Fen will be central to delivering the UK’s clean power ambitions, reducing reliance on fossil fuels and creating a more resilient energy system.”
A spokesman for the Department for Energy Security and Net Zero said: “We are reversing decades of underinvestment to upgrade the grid, building an energy system that can bring down bills for good.”