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- Renewable projects between now and 2029 could cut wholesale power prices by 8% from current levels
- UKERC reported that annual electricity bills have risen by £166 since 2021
- The research body’s analysis has offered a differing opinion to widespread media and political stories
Expensive gas prices are responsible for 66% of the rise in household electricity bills, according to new analysis by the UK Energy Research Centre (UKERC).
The research body’s analysis has offered a differing opinion to widespread media and political stories that seek to blame climate policies for high bills.
Speaking to Carbon Brief, Kaylen Camacho McCluskey, research assistant, UKERC, said that despite misleading claims about policy costs, gas prices are the main driver of high bills.
She told the publication: “While the story of what has driven up GB consumer electricity bills is often largely attributed to policy costs, our analysis showed this isn’t the case. Volatile, gas-linked market prices – not green policies, as some misleading claims have suggested – dominated the real-terms increase in bills since 2021.”
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In its 2025 review of UK energy policy, UKERC reported that annual electricity bills have risen by £166 since 2021, and found that two-thirds of this increase is due to increased wholesale gas prices.
UKERC estimated that gas-fired generators set the wholesale price of power around 90% of the time in 2025, and a surge of clean power means that this figure would reduce to around 60% by 2029.
The report also found that renewable projects set to go live between now and 2029 could cut wholesale power prices by 8% from current levels.
As a result, the UKERC is calling on the government to strengthen these “downward trends” by shifting older renewable plants onto fixed-price contracts for difference.
The UKERC analysis showed that rising network charges were the second-largest contributor to the rise in bills since 2021, and further grid investments are set to add further pressure on bills over the next few years.
Policy costs are only the third-largest driver of current high bills, linked to just 12% of the rise for typical households.
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