Households across Britain are facing a significant increase in their electricity bills despite wholesale energy prices falling, according to new independent research. The analysis reveals that green policy costs attached to Energy Secretary Ed Miliband's Net Zero drive will add £160 to annual electricity bills by 2030.
The Rising Cost of Going Green
Research conducted by independent energy analyst Ben James presents a detailed breakdown of forthcoming energy expenses. The study indicates that the average household will pay £1,126 for electricity by 2030, representing a substantial increase from the current average of £966.
This projected rise occurs despite an anticipated £105 reduction in wholesale electricity costs, driven by cheaper renewable power generation. The savings from wholesale markets will be completely overshadowed by increasing policy costs, leading to an overall 16 percent increase in electricity bills.
Breaking Down the Additional Charges
The analysis identifies several specific charges contributing to the bill increase. Households will pay £19 per year to fund the new Sizewell C nuclear power plant, despite the facility not being expected to generate electricity until the mid-2030s.
Another significant cost comes from 'balancing' charges, which are projected to reach £91 annually by 2030. These costs arise from managing supply and demand on the National Grid, particularly as Britain transitions to renewable energy sources.
Rachel Fletcher, a top executive at Octopus Energy, recently warned Members of Parliament that bills could increase by a fifth within the next four years due to rising government policy costs. She emphasised that 'urgent consideration' was needed to address these increases, including levies supporting upgrades to gas and electricity networks.
Government Response and Industry Concerns
Energy Secretary Ed Miliband has defended the green levies, denying that his Net Zero strategy is responsible for keeping energy costs high. Speaking at the COP30 climate summit in Brazil, Miliband insisted that updating Britain's 'ageing electricity infrastructure' was necessary regardless of whether the country continued with fossil fuels or switched to 'clean power'.
The minister also reaffirmed Labour's commitment to reducing bills by up to £300 by 2030, though the new research suggests this promise faces significant challenges.
Mr James warned that the government is 'locking in' a historic amount of future costs through current investment decisions. 'The decisions taken in the coming months and years will commit a significant proportion of UK bills for decades,' he stated. 'It's crucial that we ensure every new agreement delivers value for money.'
The energy analyst identified battery storage technology as 'one of the most promising levers for reducing bills', suggesting it could lower the need for additional grid infrastructure.
A Government spokesperson challenged the analysis, claiming it over-estimated the costs of decarbonising the grid and 'ignored the benefits of clean energy'. They maintained that becoming 'a clean energy superpower' represents the only sustainable way to reduce energy bills long-term while providing energy security.
