Expensive gas, not the UK's net-zero target, is behind nearly 90% of the rise in household electricity bills since 2020, according to new analysis by thinktank Nesta shared with Carbon Brief. The study contradicts a common political and media narrative blaming climate policy for high energy costs.
Nesta found that of the £180 real-terms increase in typical annual electricity bills between October 2020 and October 2026, £161 came from wholesale costs driven by gas prices. For gas bills, wholesale costs account for 77% of the £368 rise. In contrast, renewable contracts for difference are currently cutting electricity bills by £17, and government policy costs have fallen from 16% to 7% of dual-fuel bills.
The analysis comes as UK wholesale gas prices hit 220p per therm in October 2026, above the 2022 average, amid Middle East conflict. It also follows the government's approval of the Jackdaw gas field in the North Sea, despite stating it would not affect prices. Andrew Sissons of Nesta said net-zero is "helping to shelter Britain from the impact of expensive gas," adding that upgrading the grid is not cost-neutral, but the price tag is dwarfed by rising gas prices.