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Essay · Crossbencher ·

Cheap power, expensive country

Cleaner electricity needs to become affordable electricity. That requires attention to the whole system and the way users receive its benefits.

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Wanting cleaner energy doesn't oblige anyone to accept unnecessarily expensive electricity. Britain needs to cut emissions, maintain a reliable supply and make power affordable enough for households and industry. We should be able to ask whether the way the system works helps us achieve all three.

There are real costs whichever route we choose. Infrastructure needs investment. Dependence on imported fuel carries risks. Pollution and climate change have consequences beyond the immediate bill. The cheapest-looking option isn't always cheapest once those costs are included.

That still leaves plenty to question about Britain's prices.

Why gas matters beyond its share of generation

In a wholesale market based on marginal pricing, the price is influenced by the most expensive generation needed to meet demand. Gas-fired stations can therefore affect the price of electricity even when other sources provide much of the supply.

The ONS's 2025 examination of business energy costs described the importance of gas in setting British electricity prices. It also documented the sharp rise in industrial electricity costs after 2021. The exact rankings depend on the year, tax treatment and countries reporting, but the pressure on British users was substantial.

That doesn't mean marginal pricing is a peculiarly British mistake, or that changing it would remove every cost. Similar arrangements operate elsewhere. Contracts, hedging, network charges, taxes and policy costs all affect what a customer eventually pays.

It does mean that adding cheaper generation doesn't automatically produce an equivalent reduction in every bill. We need to understand how its benefits reach users.

The power has to reach the customer

Generation is only part of the system. Connections, transmission and storage affect whether electricity can be delivered when and where it is needed. Delays can leave useful capacity waiting while customers continue paying for a constrained network.

Those are practical choices about investment, market arrangements and permission to build. They deserve scrutiny rather than being dismissed as unavoidable consequences of caring about the environment.

A credible energy policy needs to explain the whole bill and the trade-offs involved in reducing it. I don't want an argument in which concern about climate excuses every cost, or concern about cost excuses ignoring climate and security. Affordable power is part of making the transition workable, particularly for industries deciding whether they can afford to remain here.

Cheap power, expensive country · Crossbencher