Energy Prices in the UK: Uncovering the Truth Behind the Recent Hikes

Published: 13 March 2026. The English Chronicle Desk. The English Chronicle Online.

The current atmosphere regarding the British economy is thick with the metaphorical smoke of burning lies and misinformation. As global oil and gas prices reach new heights due to international conflicts, a familiar chorus of voices has emerged. These critics of climate policy have become increasingly loud and aggressive in their assertions. Right-wing politicians and various think tanks claim that energy security will improve if we abandon our green goals. They suggest that our monthly bills will fall if the nation reinvests in North Sea gas. These claims are not merely slightly inaccurate or poorly researched by the authors. They represent the exact opposite of the historical and economic truth of our situation.

Two distinct trends have defined the energy landscape over the past few decades in Britain. The price of electricity has soared recently and contributed heavily to the rising cost of living. Simultaneously, the proportion of electricity we receive from renewable sources has grown quite significantly. Renewables accounted for only three percent in 2000 but have reached forty-seven percent today. Critics point to these two facts and claim one must have caused the other. They argue that more renewable energy leads directly to higher prices for the average consumer. This narrative is frequently pushed by those who wish to maintain the old status quo.

The reality of the situation is that renewables are actually the cheapest power sources available. Electricity produced by wind and solar power costs far less than traditional fossil fuel methods. This trend is not unique to the United Kingdom as it reflects the global market. However, the price of electricity does not simply reflect the mix of its various sources. Instead, the market price is set by the most expensive component needed at that time. That expensive component is almost always fossil gas which remains a very volatile resource. Even before the latest international conflicts, gas prices were reaching astronomical levels for many households.

This pricing paradox happens because of a specific system known as marginal cost pricing. Most of the power coming through our wires is supplied by renewables and nuclear. However, electricity is sold on the wholesale market based on the power source of last resort. This source fills the remaining gaps in supply and is usually expensive fossil gas. While the use of fossil fuels for electricity has fallen significantly, gas still dictates prices. In the United Kingdom, gas sets the price ninety-eight percent of the time for consumers. This figure is much higher than the European average of around thirty-nine percent today.

Other European nations rely on different backup sources like hydroelectricity or nuclear power systems. Better electricity storage would provide our nation with a cheaper and more secure energy source. The government is currently developing these storage solutions despite facing significant fury from the media. Ironically, Norway supplies seventy-six percent of our gas imports but rarely uses it for power. Norway generates most of its electricity through hydropower and wind instead of burning its gas. They treat their fossil fuel trade like a commodity to be sold elsewhere for profit. This allows them to maintain low domestic prices while exporting expensive gas to us.

The Institute of Economic Affairs recently made a claim that highlighted their own logical inconsistencies. They argued that because gas costs the same everywhere, it cannot be driving electricity prices. They noted that industrial electricity in Norway costs less than half of what we pay. The reason for this price gap is simply that Norway scarcely uses gas themselves. It is always wise to check the facts before making such bold public statements. Such inaccuracies abound in the modern political landscape and on various social media platforms. Former officials have claimed that our resilience depends on maximizing extraction from the North Sea.

This claim ignores the fact that the government spent billions protecting the economy recently. That massive expenditure was required specifically because of a spike in global gas prices. True energy resilience would mean moving away from these volatile and expensive international markets entirely. We are often told that extracting more gas at home would make electricity cheaper. This ignores basic economics and how the international energy market actually functions today. The price of gas is set globally and influenced by major suppliers like Iran. Local extraction levels in the North Sea are too small to shift global prices.

The remaining gas reserves in our waters are also very difficult and expensive to extract. The industry depends on a generous tax regime to remain profitable for private companies. These companies do not offer the gas to British customers at any special discounted rates. They sell it on the international market at the highest possible price they can get. Extracting every last bit of gas would not lower the price by a penny. Furthermore, the UK has already used the majority of its accessible North Sea reserves. We cannot rely on a depleting resource to solve a long-term economic pricing crisis.

The money from past extraction could have funded a massive sovereign wealth fund for us. Norway used their profits to fund social care, railways, and other vital public services. Instead, private companies walked away with most of the profits during the era of liberalization. This represents a significant missed opportunity for the British public and our national infrastructure. Similar nonsense was spread last year when the steel industry faced a very difficult period. The press insisted that net zero policies were the primary cause of the industry’s struggles. If they had spoken to industry leaders, they would have heard a different story.

Steel production is actually exempt from most of the environmental levies currently in place. Their problem is the same one that every household in the country faces today. High wholesale prices are responsible for the price disparity between us and our neighbors. While we do pay some green charges, they are a small part of our bills. These charges account for only a tiny fraction of the recent rise in energy costs. Most of the increase is driven by wholesale prices which are dictated by gas. These green levies are actually investments into a future carbon-free and much cheaper grid.

It is important to distinguish between current spending and capital investment for our shared future. Many who obsess over money seem unable or unwilling to make this simple distinction. The reason for this epidemic of misinformation is actually quite simple to understand. Newspaper owners and politicians often belong to a class that wants to control resources. You can control fossil fuels because their reserves are concentrated in specific geographic areas. You cannot easily control or monopolize the wind and the sun in that way. These renewable sources are everywhere and represent a more democratic form of energy production.

Renewables are highly competitive and therefore offer lower profit margins for big energy corporations. Fossil fuels remain uncompetitive but provide incredibly high profits for those who own the resources. Media owners often have significant investments in these traditional and dirty energy sectors today. It is often hard to distinguish between fossil fuel lobbyists and some media outlets. This is because their interests are perfectly aligned against the transition to cleaner power. For the sake of the ultra-rich, the public is being misled about energy. We must demand a system that prioritizes the people over the profits of billionaires.

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