{"id":119332,"date":"2026-04-17T10:15:00","date_gmt":"2026-04-17T09:15:00","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=119332"},"modified":"2026-04-17T09:40:57","modified_gmt":"2026-04-17T08:40:57","slug":"energy-bills-set-for-major-drop","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/energy-bills-set-for-major-drop\/","title":{"rendered":"Energy Bills Set for Major Drop as UK Targets Gas Pricing System"},"content":{"rendered":"\n<p>Chancellor Rachel Reeves and Energy Secretary Ed Miliband are working on a plan to \u201cdelink\u201d electricity prices from gas, with further details expected within weeks. The move reflects growing concern that the current pricing system no longer reflects how <strong>electricity <\/strong>is generated, particularly as renewable energy becomes more prominent.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>A Pricing System Tied to Gas despite Changing Energy Mix<\/strong><\/h2>\n\n\n\n<p>Under the UK\u2019s marginal cost pricing model, gas typically sets the wholesale price of electricity, even when a significant share of power comes from cheaper renewable sources. According to reports, this means households often pay more for electricity when global gas prices rise, regardless of the actual cost of production.<\/p>\n\n\n\n<p><strong>Rachel Reeves<\/strong> highlighted this issue while speaking in Washington, noting that \u201c<em>when gas prices are high, we end up paying more for our electricity, even though the cost of producing it doesn\u2019t change<\/em>\u201d. This disconnect has become more visible as wind and solar contribute a larger share of the energy mix.<\/p>\n\n\n\n<p>The Department for Energy Security and Net Zero has indicated that renewables have already reduced the frequency with which gas sets electricity prices by about a third since the early 2020s. Still, gas remains the dominant price-setting factor in most cases.<\/p>\n\n\n\n<p>Ed Miliband has previously described the UK\u2019s reliance on gas-linked pricing as part of a \u201cfossil fuel rollercoaster\u201d, reinforcing the government\u2019s broader aim to stabilise <a href=\"https:\/\/en.econostrum.info\/uk\/new-energy-announcement-bill-reduction\/\" data-type=\"post\" data-id=\"117734\">energy <\/a>costs. According to The Guardian, ministers see reforming this pricing structure as a way to better align costs with the country\u2019s evolving energy system.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">\ud83c\udfe0 Here are 10 energy saving tips that you can do around your house to reduce your energy usage and in turn reduce your energy bills.<br><br>Tap our link in bio for more. <a href=\"https:\/\/t.co\/RsB2iK43J0\">pic.twitter.com\/RsB2iK43J0<\/a><\/p>&mdash; Ofgem (@ofgem) <a href=\"https:\/\/twitter.com\/ofgem\/status\/2045019471971037572?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">April 17, 2026<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Reform Efforts Alongside Energy Security and Market Pressures<\/strong><\/h2>\n\n\n\n<p>The proposed changes come amid heightened volatility in global energy markets, partly driven by geopolitical tensions. Recent conflict involving Iran has contributed to rising oil and gas prices, which in turn affect electricity costs under the current system.<\/p>\n\n\n\n<p>Industry figures acknowledge that any shift away from gas-linked pricing will take time. <a href=\"https:\/\/uk.linkedin.com\/in\/dhara-vyas\" target=\"_blank\" rel=\"noopener\">Dhara Vyas<\/a>, chief executive of Energy UK, said that decoupling would likely happen gradually as renewable capacity increases, adding that the influence of gas on pricing should decrease over time.<\/p>\n\n\n\n<p>At the same time, the government continues to support domestic oil and gas production through measures such as North Sea \u201ctiebacks\u201d. Reeves explained that these involve using existing infrastructure to develop additional resources, describing them as \u201cthe quickest way to bring on stream more oil and gas\u201d.<\/p>\n\n\n\n<p>Environmental groups have also weighed in on the proposed reforms. <strong>Greenpeace <\/strong>has argued that removing gas from its central role in price-setting could save billions annually and allow consumers to benefit more directly from cheaper renewable energy. According to the organisation, the current system leaves electricity prices overly exposed to fluctuations in fossil fuel markets.<\/p>\n\n\n\n<p>Further details of the government\u2019s plan are expected soon, as ministers work through the technical aspects with industry stakeholders. The outcome could mark a notable shift in how electricity prices are determined in the UK, with direct implications for household energy bills.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The UK government is preparing a significant reform of the energy market designed to reduce household electricity bills. The proposal focuses on breaking the long-standing link between gas prices and electricity costs, a mechanism that has exposed consumers to sharp price increases.<\/p>\n","protected":false},"author":4,"featured_media":119335,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[],"class_list":["post-119332","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/119332","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/comments?post=119332"}],"version-history":[{"count":2,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/119332\/revisions"}],"predecessor-version":[{"id":119336,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/119332\/revisions\/119336"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media\/119335"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media?parent=119332"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/categories?post=119332"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/tags?post=119332"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}