A Positive Step for UK Households battling with Gas and Electricity Prices
At Aura Retrofit, we welcome the latest progress from the government to reduce the influence of volatile global gas markets on electricity prices across Great Britain. This marks an important move towards a more stable, affordable, and sustainable energy future for both households and businesses.
Recent instability in global energy markets – particularly in the Middle East – has once again highlighted how heavily the UK has relied on international fossil fuels. Despite the growing contribution of lower-cost renewable and nuclear energy, electricity prices have continued to be affected by fluctuations in gas prices, placing unnecessary pressure on consumers.
Historically, when global events such as conflicts or supply disruptions drive up gas prices, electricity costs have risen alongside them. This has left many households exposed to price increases beyond their control, contributing to wider cost-of-living challenges.
Encouragingly, the UK is already moving in the right direction. As more renewable energy projects come online under fixed-price agreements, the overall exposure to gas price volatility is gradually decreasing. However, around 30% of the UK’s electricity generation is still tied to wholesale prices influenced by gas, meaning there is more work to be done.
To address this, the government has announced a series of measures designed to “break the link” between gas and electricity pricing, helping to create a more resilient energy system. These include:
- Introducing voluntary long-term fixed-price contracts for existing low-carbon energy generators not currently on such agreements. Covering roughly a third of the UK’s power supply, these contracts aim to provide greater price certainty and shield consumers from sudden spikes in gas prices—while ensuring value for money.
- Strengthening the Electricity Generator Levy, with the rate increasing from 45% to 55%. This ensures that when generators benefit from high gas-driven prices, a greater share of those additional profits can be redirected to support households and businesses facing rising energy costs.
Together, these steps will further reduce the proportion of electricity prices influenced by gas, while encouraging energy producers to move towards more stable, fixed-price arrangements.
There has already been significant progress. In the early 2020s, gas dictated electricity prices around 90% of the time. Today, that figure has fallen to approximately 60%, and it is expected to drop to around 50% by 2030 as the UK continues its transition to clean, homegrown energy.
For homeowners, this shift represents a major opportunity. A more stable electricity market, combined with energy-efficient technologies such as air source heat pumps and improved insulation, can significantly reduce both energy bills and carbon emissions.
At Aura Retrofit, we see these developments as a clear signal of the direction of travel: towards cleaner, more predictable energy that puts households back in control. As the government continues to accelerate renewable deployment, streamline planning, and unlock new opportunities for low-carbon energy, the benefits for UK homes will only grow.
Now is the time to take advantage of this transition. Future-proofing your home with energy-efficient upgrades that maximise comfort, reduce reliance on fossil fuels, and protect against future price shocks.
Contact Aura Retrofit today. Let’s discuss how we can help upgrade your heating system and reduce your energy bills.