Aug 28, 09:05 AM

UK Power Bills Climb Again as Surging Costs Jeopardise Net-Zero Goal

Britain’s energy regulator Ofgem said the domestic price cap will rise by 2% on 1 October, lifting the annual bill for a typical household to £1,755—about £35 more than today and £187 higher than in July 2024. The increase comes even though wholesale gas prices have returned to 2018 levels. Ofgem attributed much of the pressure to £2.7 billion in so-called balancing costs the National Grid incurs to keep supply and demand in equilibrium when intermittent wind and solar generation falls short. In a further squeeze, standing charges will climb 4% for electricity and 14% for gas. Businesses face even steeper burdens. International Energy Agency data show large U.K. industrial users paid roughly four times the electricity prices seen in the United States last year and more than double those in France and Germany. Bridgnorth Aluminium, which spends about £1 million a month on power, runs equipment unnecessarily at times to remain above the threshold that qualifies it for government subsidies. Industry groups and companies warn that persistently high power prices are undermining competitiveness and jeopardising the Labour government’s plan to achieve net-zero emissions by 2050. Ministers say an expanded ‘supercharger’ scheme—cutting up to 90% of grid charges for the most energy-intensive firms—along with continued investment in renewables will ultimately curb costs, but executives argue relief is needed sooner to keep factories operating and the transition on track.