Why UK Electricity Prices Are Still High Despite a Renewable Energy Boom

The UK hit a major milestone last year—more than half of its electricity came from renewable sources. But electricity bills are still painfully high, and the reason is surprisingly simple. According to Jillian Ambrose at The Guardian, the cost of electricity is still mostly determined by gas-fired power plants, even though they make up a shrinking part of the mix.

Under the UK’s current “marginal pricing” system, the most expensive energy source sets the market price. And since gas is almost always that source, it drives up costs for everyone—even when the grid is full of wind and solar. In fact, gas sets the electricity price 98% of the time in the UK, compared to just 40% in the EU.

With global gas prices still volatile after Russia’s invasion of Ukraine, this dependency is hurting both consumers and businesses. Households saw their annual energy bills rise to an average of £1,849 this month, while manufacturers like British steelmakers warn they can’t compete with lower energy costs elsewhere.

Experts say the solution is to stop letting gas dictate the market price. Ideas include removing gas plants from the pricing system entirely, giving them fixed contracts, or even nationalizing the last remaining ones. Meanwhile, boosting energy storage would let the UK make better use of renewable energy during peak supply periods.

Reforming the system could cut bills and emissions—two wins in one. If we want a fairer, cleaner energy future, it’s time to break our gas habit. Switch to renewables when you can, reduce fossil fuel use at home, and Support leaders pushing for sustainable energy reform.

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