Electricity prices: Three reasons why they are high in the UK

Network costs are projected to increase further by 2030, adding another £48 to a typical bill, according to calculations by energy analyst Ben James.

However the government and some energy groups also argue that reducing our national reliance on volatile international gas prices via the government’s 2030 clean power policy will keep down the UK’s wholesale electricity costs and mean household bills will be lower than they would otherwise have been.

This would be by reducing the amount of time in each year that gas sets the wholesale electricity price.

A great deal though depends on future wholesale gas prices which are impossible to accurately forecast.

Some analysts, including the government’s Climate Change Committee, also say the government should go further to remove policy costs from household electricity bills and meet them through general taxation instead, in order to avoid discouraging people from using electricity rather than gas to heat their homes.

“The way you allocate those costs matters,” says Mayo.

“They may be being put on bills or they may be being paid by consumers in other ways that are less visible, such as taxes.”