UK households could see their annual electricity bills rise by more than £260 by 2030 as the cost of renewable subsidies and upgrading the power grid increasingly feeds through to consumers, according to analysis from Boston Consulting Group.
BCG estimates that if electricity demand continues to decline, the average household electricity bill could increase by £264 to £1,145 by 2030. The consultancy argues that falling consumption means the fixed costs of maintaining and transforming the electricity system are being spread across fewer units of power.
Electricity demand has already fallen by 11% since 2015, according to the analysis. While household electricity bills have doubled over the past decade, BCG estimates only 38% of the increase came from higher wholesale energy prices, compared with 45% attributed to grid costs and policy changes, including renewable energy support.
The pressure extends beyond households. Separate research from Civitas estimates that British manufacturers paid an average £238 per megawatt-hour for electricity last year, compared with £65 in the US, £44 in China, £73 in India, £112 in France and £138 in Germany.
Civitas estimated that if UK manufacturers had benefited from US electricity prices, their 2024 energy costs would have been £11.4 billion lower, highlighting concerns about the impact of electricity prices on Britain’s industrial competitiveness.
BCG has called for more renewable subsidy costs to be transferred from electricity bills to general taxation. It also argues that increasing electricity demand, including through faster development of data centres, could spread infrastructure costs across a larger consumption base. Its proposed measures could reduce annual household bills by £324 by 2035 compared with its low-demand scenario.
The warning follows separate analysis from EDF suggesting typical household energy bills could reach £1,790 by 2030, around £130 above the current £1,663 level, partly because of green levies and grid investment.
The Office for Budget Responsibility has also estimated that renewable subsidies and other environmental levies could reach £19 billion by 2030, compared with £10 billion in 2025.
The Government said tackling the cost of living remained a priority and that it would seek to protect consumers from global energy shocks while working to bring bills down over the longer term.
