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High gas prices are responsible for two-thirds of the rise in household electricity bills since before the global energy crisis, says the UK Energy Research Centre (UKERC).

The new analysis, from one of the UK’s foremost research bodies on energy, flatly contradicts widespread media and political narratives that misleadingly seek to blame climate policies for high bills.

Kaylen Camacho McKluskey, research assistant at UKERC, tells Carbon Brief that despite “misleading claims” about policy costs, gas prices are the main driver of high bills. She says:

“While the story of what has driven up GB consumer electricity bills is often largely attributed to policy costs, our analysis shows that this is not the case. Volatile, gas-linked market prices – not green policies, as some misleading claims have suggested – dominate the real-terms increase in bills since 2021.”

In its 2025 review of UK energy policy, published today, UKERC says that annual electricity bills for typical households have risen by £166 since 2021.

It says that, after adjusting for inflation, some two-thirds of this increase (£112) is due to higher wholesale gas prices, as shown in the figure below.

(This analysis does not account for the recent surge in wholesale gas prices, which, in a matter of days, have jumped by around 40% in the UK and 140% in the US.)

Chart showing that expensive gas is still the biggest driver of high electricity bills
Contributions to the rise in annual electricity bills for typical households, £ adjusted for inflation, between April-September 2021 and April-September 2025. “Networks” includes the cost of building and operating the electricity grid. “Policy” includes costs to support clean power, as well as social policies and the “capacity market” that guarantees security of supply. “Other” includes supplier operating costs. Source: UKERC analysis of data from the Ofgem price cap.

UKERC estimates that, despite only supplying a third of the country’s electricity, gas-fired generators set the wholesale price of power around 90% of the time in 2025.

(This is slightly lower than widely cited earlier estimates, published in 2023 and covering 2021, which found gas was setting power prices 97% of the time.)

A surge of new clean power means that gas would only set wholesale power prices 60% of the time by 2029, UKERC says, adding that this would cut the nation’s exposure to “gas price shocks”.

It finds that new renewable projects set to come online over the next three years could cut wholesale power prices by 8% from current levels.

UKERC argues that the government could “strengthen…these downward trends” by shifting older renewable plants onto fixed-price “contracts for difference” (CfDs).

These older schemes, built under a policy known as the “renewables obligation”, are paid a top-up subsidy in addition to the wholesale power price, linking their receipts to high gas prices.

Newer renewable projects with CfDs get a fixed price, which is not linked to wholesale electricity prices or the price of gas power that drives it.

Prof Rob Gross, UKERC director says in a press release that “unpredictable global gas prices still dominate our power market”. He continues:

“The link between the wholesale price of gas and electricity prices continues to be the most significant factor in the price increases consumers have seen over the last few years. Government took action on some policy costs in [last year’s] budget and ongoing policies will weaken the link to gas prices. But more could be done to help ensure that the stable prices offered by renewables flow through to consumer bills.”

The UKERC analysis shows that rising network charges, linked to investments in expanding the electricity grid as well as balancing supply and demand in real time, were the second-largest contributor to the rise in bills since 2021.

Significant further grid investments are set to add further pressure on bills over the next few years. However, energy regulator Ofgem says these investments will cut bills relative to the alternative.

Policy costs are only the third-largest driver of current high bills, according to UKERC’s analysis. It says these were linked to just 12% of the rise for typical households, or £19 per year.

It is commonly argued that rising policy costs are certain to raise bills, but this tends to ignore the interplay between CfDs and wholesale power prices.

The record-breaking recent government auction for CfDs is expected to be roughly “cost neutral” for bills, potentially even generating consumer savings of £1bn a year by 2035.

As UKERC explains, this is because new renewable projects will receive CfD payments and may result in higher network costs, but they also cut wholesale power prices. A full analysis of the overall impact on bills must take all of these factors into account.

The UKERC report aligns with another recent analysis from thinktank Nesta, which said that, while there was a pressing need to look at future cost pressures from network and policy charges, “it is clear that gas is still the main source of our high energy bills to date”. It added:

“It is still true that higher gas prices are the main reason for higher energy bills for most British households when you look at the whole bill. Gas is not the only culprit, but it is still the biggest one.”

The post Expensive gas still biggest driver of high UK electricity bills, says UKERC appeared first on Carbon Brief.

Expensive gas still biggest driver of high UK electricity bills, says UKERC

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Q&A: Trump’s Greenland threats push Europe to question reliance on US gas

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For decades, Europe relied on pipelines bringing Russian gas to heat its homes and provide its electricity, arguing that President Vladimir Putin would not shoot himself in the foot by turning off the taps. That assumption was proved wrong when Russia invaded Ukraine in 2022, leading to restrictions on gas exports to European countries.

With Russian supplies largely cut off, Europe’s gas and electricity prices shot up, causing a cost-of-living crisis across the continent. While speeding up policies to get their economies off fossil fuels in the long term, European governments scrambled for alternative gas suppliers in the short term.

One of those stepping up supply to Europe was the US, which is building out liquefied natural gas (LNG) export terminals on its Gulf Coast. But with Donald Trump back in the White House and threatening to invade Greenland, before toning down his rhetoric last week, these energy ties are coming under scrutiny.

A legally binding ban on Russian gas imports was approved by European Union countries on Monday and will take effect by late 2027.

Denmark’s Prime Minister Mette Frederiksen said on the same day that “it was a huge mistake to be dependent on Russian fossil fuels. We should never have done that and now we have to make sure that we will have no dependencies on other countries outside Europe.”

    Chris Aylett has co-written a well-timed new research paper for Chatham House titled “Why renewables and electrification hold the keys to EU energy security”. He spoke to Climate Home News about northern Europe’s offshore wind ambitions and who holds the power in the US-Europe gas relationship.

    Q: On Monday, ten northern European governments gathered in Hamburg for the North Sea Summit, where they committed to developing offshore wind and interconnecting their national grids. They said this would improve Europe’s energy security. Are they right?

    A: Yes. Renewable generation, especially offshore wind, helps to reduce Europe’s dependence on imported gas, which we know only too well can be used against Europe to devastating effect. So there’s a simple energy security benefit in that respect.

    The wind projects are also combined with interconnectors. It’s really exciting because the wind assets connect to lots of different countries and this can increase the efficiency of the system and renewable generation. Interconnectors give grid managers in different countries access to more generation options, boosting energy security and pushing down prices.

    One caveat though is that new electricity infrastructure does mean new challenges, and nothing is risk free. So there will be work to do to ensure that the infrastructure is resilient to physical attack – for example the undersea cables – and cyberattacks. But that can be done, it can be mitigated, and there’s a lot of work going on in these areas.

    Q: How much of the supply chain for offshore wind is European rather than reliant on China and other countries?

    A: We live in an integrated, globalised world – and even though Europe has a pretty strong wind sector and much of what is being used to generate electricity from wind in Europe is from European suppliers, there are Chinese components in there and there are Chinese companies now which are trying to get into the European market.

    It’s not as simple as ‘use Chinese equipment or don’t use Chinese equipment’. It’s all to do with the entire supply chain. There will be decisions around what aspects you would want to buy in and use, and which you wouldn’t, and there will be security regulations involved in that. It’s certainly an aspect to consider.

    Q: In 2024, the US supplied a sixth of the EU’s gas imports. Does this make the EU reliant on the US for its gas in the same way it was on Russia? Or, with the International Energy Agency forecasting declining European gas demand and a global glut of LNG, is the US reliant on Europe? Where does the power lie – with the buyer or seller of gas?

    A: The power lies with both at the moment. Europe buys about half of the US’s LNG exports – it’s a massive customer and the US government is very keen to sell it, there’s no doubt about that. You can tell in some of the government rhetoric over the last year and the “energy dominance” agenda that they want to sell. So it seems a little bit like all the power is with the EU.

    But the issue is that there are not that many countries that export LNG – not in these quantities anyway. And the glut in LNG that is starting to emerge and is likely to play out in the run up to 2030 and beyond, most of that is going to be US producers. So you haven’t got that many options if you’re looking at which countries you get LNG from, and some of the EU’s other gas suppliers – Norway, Algeria – they’re not likely to be expanding anytime soon. Australia is expensive, Qatar is difficult.

    So there’s a mutual dependency at the moment, but the EU has a chance to escape this by reducing demand. Once it brings gas demand down by switching to renewable resources, energy efficiency and so on, then it’s in a much better situation. Whereas for the US, it might find that it’s not got any other markets to sell into, as the big hope was the US would start selling to China and that now doesn’t look to be happening.

    Q: Could the US government order its gas companies to restrict exports to Europe, in the same way Vladimir Putin did? Would it do so, given that the oil and gas industry is a major funder of the Trump administration and Trump promised to support them?

    In principle, the US government could not stop US companies exporting to Europe. There’s the rule of law, there’s contracts between companies but, with this administration, it’s not totally clear that this would be an insurmountable barrier if they wanted to exert leverage.

    What the US government could do is incentivise that the gas which would have been bound to Europe is sold into the domestic market instead. LNG is flighty, it goes where the highest price it can fetch is. We’re seeing that now with the winter storm in the US. Gas production has gone down and there’s huge demand for heating and electricity so prices have shot up in the US, so LNG is going there. Europe has had to start buying from Australia.

    If you look at the upward trajectory of US demand for electricity, with data centres combined with the scrapping of incentives for renewable deployment, you’ve got a situation where demand for gas in the US is increasing and prices are going up.

    You can imagine a situation where a populist government could go ‘right, we know US citizens benefit from US gas and we’re not going to export it’. So there’s a quite subtle sort of interplay there which wouldn’t necessarily be as brutal as what Putin did in 2022.

    This interview was shortened and edited for clarity.

    The post Q&A: Trump’s Greenland threats push Europe to question reliance on US gas appeared first on Climate Home News.

    Q&A: Trump’s Greenland threats push Europe to question reliance on US gas

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    Explainer: Out of Paris, but will the US formally quit the UN climate regime?

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    For the second time since the Paris Agreement on climate change was adopted, the US this week formally withdrew from the global pact following a 12-month mandatory period since President Donald Trump announced he would pull his country out on his first day in office in January 2025.

    Since then, the US has axed most of its international climate funding and this month said it would exit the UN climate convention (UNFCCC) – which underpins the UN climate process and the Paris Agreement – the Intergovernmental Panel on Climate Change (IPCC), which is the world’s most authoritative climate science body, and the Green Climate Fund (GCF), the world’s biggest multilateral climate fund.

    Trump to pull US out of UN climate convention and climate science body

    As the Trump administration turns its back on the UN climate regime, UN climate chief Simon Stiell described the move as a “colossal own goal”, while the GCF – to which the US has failed to deliver billions of dollars in promised support – said the country would lose its board seat but operations would continue.

    Climate diplomacy experts say some of the changes announced by the US president could remain symbolic or be reversed in the future, while warning that the reputation of the world’s second-biggest emitting country could suffer a big hit in the long term.

    Other countries may follow US Paris exit

    Marta Schaaf, Amnesty International’s climate programme director, said the US’s second exit from the Paris Agreement on January 27 (the first was during Trump’s first term) “sets a disturbing precedent” that could instigate a “race to the bottom”, encouraging other countries to leave.

    “The US is one of several powerful anti-climate actors but as an influential superpower, this decision, along with acts of coercion and bullying of other countries and powerful actors to double down on fossil fuels, causes particular harm and threatens to reverse more than a decade of global climate progress under the agreement,” she said in a statement.

    So far no other signatories have publicly announced they will quit the 2015 climate agreement, but Israeli media recently reported that the country is discussing a withdrawal under pressure from the US. Last year, Argentina also hinted at a possible exit but did not follow through.

    COP30 chief calls for two-tier climate system to speed up action beyond consensus

    COP30 President André Aranha Corrêa do Lago said himself that in the months leading up to last year’s UN climate conference in Brazil, there was “a lot of noise about possible additional exits”, after the world’s largest economy said it would withdraw.

    The Trump administration has been called out in other UN processes, after being accused of employing “bullying” tactics at the International Maritime Organization (IMO) to persuade smaller countries to vote against the entry into force of a green shipping deal. This pressure resulted in a delayed decision.

    Allie Rosenbluth, Oil Change International’s US campaign manager, said the US withdrawal from the Paris Agreement “is a betrayal of the communities at risk from climate disaster, especially those on the frontlines of the crisis in the Global South”.

    Legal uncertainties around UNFCCC withdrawal

    This January, in an unprecedented move, the White House also announced the US would leave the broader UN Framework Convention on Climate Change (UNFCCC). This would take effect one year after formally notifying the UN, which it had yet to do as of the time of publication.

    The UNFCCC could be harder to rejoin than the Paris Agreement – which was last done through an executive order issued by former President Joe Biden – because the US Senate first gave unamimous “advice and consent” for ratification of the UNFCCC in 1992, making the legal situation more complex.

    Some experts believe the US would need Senate authorisation to formally withdraw from the UNFCCC, and there are questions around whether the move would be legal at all.

    Trump’s presidential memorandum says that “for United Nations entities, withdrawal means ceasing participation in or funding to those entities to the extent permitted by law”. To all intents and purposes, the US had already disengaged from the UN climate process during Trump’s first year in office, cutting funding for the UN’s climate body and not sending a delegation to COP30.

    However, if the US does not formally notify the UN of its withdrawal from the UNFCCC, that could potentially ease legal concerns for the Trump administration, according to Michael Gerrard, climate change law professor at Columbia Law School.

    Could the US rejoin the UNFCCC?

    Gerrard told Climate Home News that if the Trump administration does not officially withdraw from the UNFCCC, “then I don’t see a legal obstacle to a subsequent administration resuming funding and participation”. “Even if the US does formally withdraw now, a new president might well be able to rely on the prior consent in rejoining; that issue has never been decided by the Supreme Court,” he added.

    Sue Biniaz, the US State Department’s Principal Deputy Special Envoy for Climate until January 2025, and Jean Galbraith, professor at the University of Pennsylvania Carey Law School, wrote on the Just Security blog that the mainstream legal view is that the president may constitutionally withdraw the US from a Senate-approved treaty where – as here – the withdrawal is lawful under international law and neither the Senate’s resolution of “advice and consent” nor a congressional law has put limits on withdrawal.

      Under international law, they added, rejoining is straightforward. For the UNFCCC, a state can become a party 90 days after depositing its instrument of ratification or accession, and following that, the US could rejoin the Paris Agreement, which would take 30 days after the deposit of its instrument.

      From the perspective of domestic law, the two climate law experts argued that the original Senate resolution remains in effect (unless repealed by the Senate) and provides the legal authority needed for a future president to rejoin the UNFCCC. He or she could also seek a second round of “advice and consent”, ask Congress to approve rejoining, or potentially join the UNFCCC under the president’s independent constitutional powers, they added.

      Loss of US leadership and credibility

      Irrespective of whether the White House does move to rejoin the UN climate regime at any point, analysts said the Trump administration’s hostile attitude and disengagement has damaged the standing of the US when it comes to global climate action and the energy transition.

      Biniaz and Galbraith wrote that the world is used to the US “flip-flopping on climate”, because it refused to ratify the Kyoto Protocol and quit the Paris Agreement once before, but “withdrawal from the entire regime takes US abdication of climate leadership to a new level”.

      Though many countries may be relieved that the Trump administration is not participating given its current policies, they said: “in the longer term, US absence could have a negative impact on the effectiveness of the regime and the willingness of other countries to take ambitious action.”

      Nikki Reisch, climate and energy director at the Center for International Environmental Law, warned that “it will not be easy for the US to regain credibility or leadership on climate.”

      While an “informal withdrawal” from the UNFCCC may “avoid some paperwork” and avoid potential lawsuits, she said it would not “insulate this administration from scrutiny and legal challenge on other grounds, particularly as it continues to unwind climate progress, dismantle environmental protections, and expand production of the fossil fuels”.

      Reisch noted that US states and local governments have been making efforts to “fill the void where the federal government has abdicated its duties”. “Other countries, too, should see the Trump administration’s retreat as an invitation to step up, stand together and move forward,” she added.

      The post Explainer: Out of Paris, but will the US formally quit the UN climate regime? appeared first on Climate Home News.

      Explainer: Out of Paris, but will the US formally quit the UN climate regime?

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      Climate Change

      Texas’ Grid Holds Up During Winter Weather

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      ERCOT’s performance five years ago left Texans worried about the state grid’s ability to deal with freezing weather.

      In the eyes of many Texans, this weekend’s freezing weather was a test.

      Texas’ Grid Holds Up During Winter Weather

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