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.)
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
Climate Change
Commencement of NSW Forestry assessment a ‘chance to fix a broken system’ and deliver urgent forest protection
SYDNEY, Friday 18 September 2026 — In response to the Federal and NSW government’s announcement to commence an assessment of NSW forestry under the new national nature laws, Adele Chasson, Nature Policy Lead at Greenpeace Australia Pacific said:
“This is the Federal Government’s chance to fix a broken system that has enabled the destruction of NSW’s precious forests for far too long.
“Native forest logging continues to smash threatened species habitat. In NSW, it is pushing unique wildlife like koalas, greater gliders and glossy black cockatoos towards extinction. The state-owned logging agency has a disastrous record of environmental damage and breaches.
“The Regional Forest Agreement (RFA) system has failed, allowing the industrial logging of special forests for decades across Australia with no oversight. Thankfully, the Federal Government has started the process to finally remove the logging industry’s exemption from national nature laws.
“It’s time for the Federal Government to deliver the protection that forests urgently need, and that Australians overwhelmingly want. The Government must ensure a thorough assessment of the devastating impacts of native forest logging in NSW, and establish strong environmental rules that states must follow.
“These forests have been cared for by First Nations people for tens of thousands of years. They are some of the most biodiverse on the planet, store carbon, clean our air and water. It’s critical we protect them.”
ENDS
Media contact:
Kate O’Callaghan on 0406 231 892 or kate.ocallaghan@greenpeace.org
What happens when a love of marine life meets a playful imagination?
Sydney artist, illustrator and children’s author Sha’an d’Anthes, better known as Furry Little Peach, has teamed up with Greenpeace to create Happy Ocean Happy Planet: a joyful celebration of the extraordinary creatures that call our oceans home.
Sha’an felt inspired to create an illustration celebrating the beauty and resilience of marine life. Its hopeful message, A Happy Ocean is a Happy Planet, sparked a special collaboration with Greenpeace and a limited-edition t-shirt designed to help protect the oceans that inspired it.
The exclusive Furry Little Peach tee is available as a gift to new regular Greenpeace donors who give $30 or more and make at least three donations. By becoming a regular giver, you’ll help Greenpeace campaign for ocean protection.
ARTIST INTERVIEW: Sha’an d’Anthes (Furry Little Peach)
Sha’an shares the story behind the artwork, the local marine creatures featured in the design and why hope can be such a powerful force for action.
Hi Sha’an! Can you tell us a little about yourself and what you do?
My name is Sha’an d’Anthes, I also go by the pseudonym Furry Little Peach and I’m an illustrator, artist and children’s author based in Sydney, Australia. I love creating joyful, vibrant and nostalgic art that looks at the world through the lens of childlike wonder.
What do you love about drawing animals and nature?
I love all of the different shapes, colour and narrative you get to explore when drawing animals and nature. I’m also a city-slicker these days, and so I think that my work is a sort of escapism (for myself and hopefully for my audience).
How did the Greenpeace collaboration come about?
I went to the premiere of David Attenborough’s documentary Ocean, and felt compelled to create something to share the message of the film. This t-shirt is actually based off of that illustration including the tagline in I included when I shared it “A Happy Ocean is a Happy Planet”. I’m so grateful Greenpeace approached me for the project – it was a blast.
Where did you start when creating the Happy Ocean Happy Planet design?
The Happy Ocean tee starts the same as all of my work – with a brainstorm/braindump and really loose concept sketches.
How did you choose the animals for the illustration?
I actually asked Greenpeace to help me with the research of local marine life and they were so accommodating. They very quickly delivered me a huge list of local species of fish, mammals and coral and I just went through and looked up each creature and curated a little group of sea life that I thought would look sweet together – a mix of sizes, types, colours, textures and shapes.
What did you use to create the artwork?
So much of my work is traditional, but when it comes to things like t-shirts I always use digital drawing programs because I like to draw each colour in a separate layer which requires me to jump in and out of layers because it allows me to control colour and printing. When working digitally I always sketch in Procreate (an Australian digital art app), and then with this project I created final art in Adobe Fresco because it called for a vector graphic (an image that can be blown up to any size).
Do you have a favourite creature in the design?
I love painting Humpback Whales and always have, but I also have a soft spot for the sweet little Jelly Blubber jellyfish.
What did you want people to feel when they saw the artwork?
I specifically wanted to focus on the outcome that all of us want to see – a happy, thriving ocean where creatures are given the time and space to balance themselves. I feel that even when tackling tough subjects, leaning into hope is my natural inclination. As long as we have hope that things can be better, we will continue to take action.
What was the most fun part of creating it?
I actually documented the entire process of this project in a studio vlog on YouTube – and you can see how much fun I’m having doing final art jumping between layers and building the image. I had just come off completing final art for two books which are multi-year long projects, so being able to do a project that from start to finish in just a few days was really freeing at the time.
What does a “happy ocean” mean to you?
An ocean that given the time and space to repair and balance itself. Something I really took away from David Attenborough’s Ocean is that ocean ecosystems are actually really good at repairing themselves if we just let them do their thing.
How can people get their hands on the t-shirt?
The shirt is a reward for regular givers to Greenpeace – those who commit to at least 3 months of donations will receive the tee as a gift. Read about how at http://act.gp/flp-tee
How is Greenpeace helping to make our oceans happier places?
They have a deep focus on the health and happiness of our oceans through advocating for the set up of marine sanctuaries, holding big ocean polluters to account and calling for a ban on deep sea mining.
What are you working on next?
I will be jumping headfirst into Peachtober – an annual daily art challenge I run each year in October, if there are any artists reading this it’s a great time so please come join! In terms of publications my next picture book The Late Bird will be out in February 2027 (published by Harper Collins US) and then I have an creative activity book for adults coming out next August with Chronicle US and Penguin Australia. Otherwise you can always check out what I’m tinkering away with in my studio on Instagram and YouTube.
Climate Change
AI giant Anthropic’s first Australian data centre deal an “egregious” example of Big Tech double talk
SYDNEY, Thursday 17 September 2026 — Greenpeace Australia Pacific has slammed AI giant Anthropic’s deal for its first Australian site in Queensland’s Western Downs, the heart of coal seam gas country, saying the project will entrench gas and turbocharge climate pollution.
The expected electricity demand from the data centre site, situated in the middle of the Western Downs coal seam gas fields, is comparable to 1.5 million Australian households. Greenpeace’s report Energy Vampires: The AI data centres draining Australia called for a moratorium on frenzied data centre development until appropriate guardrails are in place.
Joe Rafalowicz, Head of Climate and Energy at Greenpeace Australia Pacific, said: “This is an egregious example of Big Tech giants being given carte blanche to drain energy and water, and use polluting gas to fuel their hyperscale data centres.
“AI and Big Tech corporations claim to bring new renewable energy to the grid, while blatantly planning to power their operations with polluting fossil fuels.
“Planning documents show the first stage of this behemoth project could be powered by ‘behind the metre’ gas — the same playbook AI companies have used in the US, leading to a 20% increase in climate pollution from electricity. Now these companies want to bring their cowboy plans to Australia and the Federal Government is allowing it.
“If they plugged into the local grid, the power required would increase Queensland’s electricity grid emissions by around 6.6 million tonnes — an 18% rise. If they build their own gas-fired power plants, this will drive up Queensland’s emissions even more.
“Billions of dollars are now pouring into a massive pipeline of proposed new data centres, of unprecedented size, being built at incredible speed across the country. Australians should be worried about the extreme lack of scrutiny being applied to these projects, and the corporations leading the data centre charge.
“The data centre build-out is happening without the endorsement of the Australian people, yet we are the ones who will pay the price. We can not allow unchecked data centre expansion to derail our renewable energy transition, entrench gas and turbocharge climate pollution — that’s why Greenpeace has called for an urgent moratorium until appropriate guardrails are in place.”
ENDS
Media contact: Kate O’Callaghan on 0406 231 892 or kate.ocallaghan@greenpeace.org
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