Outlook 2026: UK electricity: Today and tomorrow
Net zero is not the problem for the UK’s power system. The real issue is with an outdated market design in desperate need of modernisation
The UK has some of the highest electricity prices in the world. It has become fashionable to blame this on net-zero policies, green levies or the cost of renewables. But those explanations miss the point. Wholesale prices are only 30–45% of the retail price, not far from the share of various levies and taxes. The real cause lies in poor market and system design, not decarbonisation. The very expression ‘market design’ reveals a paradox. Prices should provide information, not be an instrument of control. The British electricity system remains centralised, administratively rigid and poorly priced. Recent governments have had little or no vision regarding the shape of a future power system.
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