Net zero Electric dreams How can we decarbonise electricity without disadvantaging poorer families? 22 April 2024 Emily Fry Jonathan Marshall A low carbon electricity system will underpin the UK’s journey to net zero, making the electricity we use today greener but also fuelling our cars and keeping us warm at home in decades to come. But this overhaul of our energy system requires a significant step change in investment, with the costs of this spending eventually feeding through to households. A changing economic environment means we can’t bank on returning to the low interest rates of the 2010s, upending the assumption that the historical march to ever-lower clean energy costs will continue. At the same time, different consumption patterns between households mean a future in which prices are higher than previously envisioned would have untenable distributional impacts. This is not a reason to pause investment. Instead, policy makers need to get ahead of this issue before it comes to pass: keeping generation contracts as cheap as possible, protecting lower income households from higher costs if they come to pass, or considering where the state balance sheet could be best deployed in modernising the grid. If we step up to the challenge, we can both meet rising electricity demand, while supporting low-to-middle income households.
