Why Is Britain's Electricity the Most Expensive in the Developed World? | Free the Power

In this Free the Power podcast, IEA Energy Analyst and COO Andy Mayer speaks with David Turver, independent energy expert and author of the Eigenvalues Substack. David has been writing for the IEA on the costs of net zero and has a forthcoming essay examining whether opposition party energy policies could meaningfully address those costs. The conversation focuses on the real and growing financial burden of the Government’s Clean Power 2030 plan, using official figures from the National Energy System Operator, Ofgem, and the Office for Budget Responsibility.David breaks down the two main cost drivers: subsidies and grid integration costs. Subsidies are forecast to rise by around £3 billion a year by 2031, while grid integration costs, covering the capacity market, grid balancing, and transmission network expansion, are set to triple from £8 billion to £25 billion over the same period. That adds roughly £20 billion to the annual cost of running the electricity system, against a backdrop where the UK already had the most expensive industrial electricity prices in the developed world in 2024. David contrasts this with Ed Miliband’s claim that Clean Power 2030 can bring bills down for good, describing it as stretching a point beyond credulity.The discussion then turns to what the opposition parties are actually proposing. David assesses the Conservatives’ pledges to scrap the Renewables Obligation and remove carbon taxes, alongside Reform’s commitment to cancel contracts from Allocation Round 7. He finds both welcome but insufficient, with costs still set to be over £8 billion higher in 2030/31 than today even if a right-of-centre government takes power in 2028. The conversation covers the legal difficulties of unwinding offshore wind contracts, the ageing gas fleet, the risk of supply shortfalls, and what a future government would need to do to bring industrial electricity prices into the lowest quartile of the OECD.The Institute of Economic Affairs is a registered educational charity. It does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.The views represented here are those of the speakers alone, not those of the Institute, its Managing Trustees, Academic Advisory Council members or senior staff. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit ieainsider.substack.com/subscribe