A Step Towards Fairer Energy Prices and Bills for UK Homes
At HEART, we strongly support the government’s latest efforts to reduce the impact that global gas prices have on electricity costs across Great Britain. This is an important development in building a more reliable, cost-effective, and low-carbon energy system for households and businesses alike.
Recent global uncertainty—particularly in key energy-producing regions—has once again exposed how dependent the UK has been on international fossil fuel markets. Even as more renewable and nuclear energy is added to the grid at lower cost, electricity prices have continued to rise and fall in line with gas markets. This has meant many households are paying more than necessary for their energy.
Traditionally with energy prices, when gas prices spike due to geopolitical events or supply issues, electricity prices have followed suit. This link has made it difficult for households to manage energy costs, contributing to ongoing financial pressure for many families.
There are, however, clear signs of progress. The UK’s increasing investment in renewable energy—much of it secured through long-term, fixed-price agreements—is already helping to reduce exposure to volatile gas prices. That said, around 30% of electricity generation is still influenced by gas, meaning reform remains essential.
More stable energy prices
To tackle this, the government has outlined plans to weaken this link and create a more stable pricing structure. Key proposals include:
- Offering voluntary long-term fixed-price contracts to existing low-carbon generators not currently on these agreements. This approach, which covers a significant share of the UK’s electricity supply, is designed to deliver greater price stability and protect consumers from sudden increases driven by gas markets.
- Increasing the Electricity Generator Levy from 45% to 55%, ensuring that when energy companies benefit from high gas-related prices, a larger portion of those profits is returned to support households and businesses.
These measures represent a meaningful shift towards a system where electricity prices better reflect the true cost of generation—particularly from cheaper, cleaner sources.
The direction of travel is already clear. In the early 2020s, gas set electricity prices around 90% of the time. Today, that figure has reduced to roughly 60%, with expectations it could fall to around 50% by 2030 as the UK continues to expand its clean energy capacity.
For homeowners, this transition creates a real opportunity. As electricity pricing becomes more stable, combining it with energy efficiency improvements—such as better insulation and low-carbon heating systems like air source heat pumps—can significantly lower energy bills while reducing environmental impact.
At HEART, we see this as a pivotal moment. Moving away from fossil fuel dependency and towards a more balanced energy system gives households greater control over their energy use and costs. As policy, infrastructure, and technology continue to evolve, the benefits for UK homes will only increase.
Now is the ideal time to act—investing in energy efficiency and low-carbon solutions to create a more comfortable home, reduce reliance on volatile fuel markets, and safeguard against future price uncertainty. Contact HEART and learn how we can help to reduce your fuel costs.