The Tony Blair Institute for Global Change has called for a major reset of Britain’s energy strategy as households face another increase in bills this winter.
Energy regulator Ofgem announced on Wednesday that the price cap will rise by 4% from October, taking the annualised bill for a typical dual-fuel household paying by direct debit from £1,663 to £1,723. Around 22 million households are protected by the cap, although roughly 11 million are on fixed tariffs and will not be affected by the latest rise.
Responding to the pressure facing households, the Tony Blair Institute said:
“Household energy bills have risen to the highest level in three years while families across the country continue to feel the squeeze.”
The Institute is arguing for what it calls “Cheaper Power 2030, Net Zero 2050” — maintaining Britain’s commitment to net zero while putting affordability, energy security and economic growth more firmly at the centre of the transition.
Its report argues that Britain has successfully reduced emissions from electricity generation but has failed to ensure that consumers and businesses benefit from sufficiently cheap power.
The Institute warns that UK electricity prices remain among the highest in the developed world and argues that cheaper, abundant electricity will increasingly determine Britain’s ability to attract investment in areas including artificial intelligence, advanced manufacturing and other energy-intensive industries.
It says:
“Clean electricity is the future of UK energy – for the climate, for national security and for long-term economic strength.”
But the report argues that the current system needs to become more flexible and cost-conscious, warning that an energy transition which raises bills and undermines competitiveness risks losing public support.
Among its recommendations are annual reviews of the pathway towards clean power, reforms to electricity markets, faster planning and grid development, greater competition between technologies and a stronger focus on storage and flexibility.
The Institute also advocates expanding nuclear power where it can provide reliable low-carbon generation at competitive cost, while reassessing expensive technologies and subsidies that it believes do not offer sufficient value for consumers.
One of its more significant proposals is to reconsider some carbon taxes on gas until 2030 as a temporary measure to reduce costs, while retaining the overall commitment to achieving net zero by 2050.
The Institute stresses that its proposals do not represent abandoning climate targets. Instead, it argues that lower electricity prices would actually accelerate decarbonisation by making electric vehicles, heat pumps and electrified industrial processes more attractive.
The latest Ofgem increase comes after prices had already risen by 13% in July, largely as a result of higher wholesale gas prices linked to conflict in the Middle East. Ofgem says the new October cap reflects changes in the underlying costs of supplying energy.
For the Tony Blair Institute, the latest increase reinforces its argument that Britain needs to make cheap energy a central economic objective rather than treating energy policy primarily as a question of emissions targets.
Its central message is that the country does not need to choose between cheaper bills and net zero — but that the energy transition must be redesigned so that affordability, security and decarbonisation advance together.
Read the full report: Cheaper Power 2030, Net Zero 2050: Resetting UK electricity strategy.
