Independent Thinking Why are UK energy costs so high? And how to bring them down
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Apr 1, 2026 Sir Dieter Helm, Oxford professor and longtime energy adviser, reflects on why UK bills are so high. He links post-privatisation pricing, deindustrialisation and loss of nuclear to rising costs. He discusses the security risks from declining North Sea gas, the hidden system costs of intermittent renewables, and realistic trade-offs between cheap, green and secure energy.
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Privatisation Left UK Starting From High Prices
- The UK’s high energy prices trace back to privatisation and treating industry like domestic consumers, removing industrial pricing concessions.
- Dieter Helm explains this raised starting prices post-1980s and later drove energy-intensive industry closures like refineries and fertiliser plants.
Just-In Gas System Made UK Vulnerable
- The UK became unusually exposed to global gas markets by abandoning coal and relying on North Sea gas as a just-in supply.
- As North Sea production declined and storage vanished, the UK now buys gas at volatile spot/LNG prices, raising consumer bills.
Intermittency Forces Twice The Capacity And Grid
- Renewables are intermittent and require much more capacity and grid to deliver the same peak supply.
- Helm quantifies growth from ~60GW capacity to ~120GW to meet similar peak demand, driven by offshore wind siting and intermittency.