High Energy Costs equal Deindustrialization.
UK Energy Mix (2024, Electricity Generation)
Based on available data for 2024, the UK’s electricity generation mix reflects a transition toward cleaner energy, with renewables surpassing fossil fuels. Here’s the breakdown:
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Renewables: 37-45% (~103 TWh)
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Wind: 29% (82 TWh, 49.7 TWh offshore)
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Solar: 4.9% (13.8 TWh)
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Hydro: 1-2%
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Biomass: 6-14% (including biogas, debated as “clean” due to emissions)
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Fossil Fuels: 34-35% (~97 TWh)
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Gas: 27-30% (72.6-85 TWh)
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Coal: 0.6% (1.6 TWh, phased out by September 2024)
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Nuclear: 13.7-15% (38.2 TWh)
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Imports: 10-15.7% (via European interconnectors)
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Other (Storage, etc.): ~0-1% (battery storage growing)
Key Points:
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Renewables led in 2024, driven by wind. Carbon intensity dropped to 124-127 gCO2/kWh from 419 gCO2/kWh in 2014.
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Total electricity generation: ~260 TWh, down 20% since 2010 due to efficiency and reduced demand.
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Gas remains significant, but coal’s exit marks progress toward the 2030 decarbonization goal (95% low-carbon sources).
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This mix applies to electricity, not total energy (where gas and oil dominate for heating/transport). In 2022, total energy supply was 39.4% gas, 34.8% oil, 14.5% renewables.
UK Energy Costs (2025)
The UK’s energy prices are among the highest globally, driven by gas reliance, infrastructure constraints, and policy costs. Under Ofgem’s price cap (April-June 2025):
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Electricity: 27.03p/kWh (~$0.368 USD/kWh, average for direct debit households)
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Gas: 6.99p/kWh (~$0.095 USD/kWh)
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Typical Annual Bill: £1,849 (~$2,518 USD) for a dual-fuel household with average use (2,900 kWh electricity, 12,000 kWh gas).
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Factors:
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Wholesale gas prices (40% of bill), linked to global markets, spiked post-Ukraine invasion.
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Network costs, policy levies (e.g., green subsidies, ~25% of electricity bill), and VAT.
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Island geography limits interconnector capacity, restricting cheap imports.
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High taxes and poor insulation exacerbate costs.
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Comparison with Highest-Cost Energy Countries
The following countries have some of the highest electricity prices globally in 2024-2025, based on available data. Prices are for residential users, converted to USD/kWh for consistency (using 1 GBP = 1.36 USD, January 2025).
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Solomon Islands:
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Electricity Cost: $0.56 USD/kWh
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Energy Mix: Heavily diesel-based (97% fossil fuels), no import options due to remote island status.
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Why High?: Reliance on imported diesel, high transport costs, no grid interconnectivity. Households spend ~149% of income on energy annually.
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Comparison to UK: Over 50% more expensive than UK’s $0.368/kWh. Unlike the UK, no renewable transition or price cap mechanisms.
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Germany:
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Electricity Cost: $0.365-$0.404 USD/kWh (Berlin: 40.4 c€/kWh, ~$0.448 USD/kWh)
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Energy Mix: 2023: 46% renewables (wind 24%, solar 12%), 24% coal, 15% gas, 10% nuclear (phased out by 2023).
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Why High?: High network charges, taxes (~50% of bill), and post-Fukushima nuclear exit increased fossil fuel reliance. Gas import dependency spiked costs after 2022 Ukraine invasion.
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Comparison to UK: Slightly higher or similar to UK’s $0.368/kWh. Germany’s renewable share is higher, but taxes and gas reliance drive costs. UK benefits from price cap; Germany’s market is less regulated.
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Denmark:
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Electricity Cost: $0.384 USD/kWh
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Energy Mix: 2023: 60% renewables (wind 40%, biomass 15%), 20% coal/gas, 10% imports. Wind-heavy, with strong interconnector access.
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Why High?: High taxes (~50% of bill), grid balancing for wind, and gas price volatility. Strong renewables lower carbon intensity (64% above EU average prices).
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Comparison to UK: Slightly higher than UK’s $0.368/kWh. Denmark’s wind reliance mirrors UK’s, but higher taxes and smaller gas share increase costs. UK’s price cap mitigates spikes better.
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Cayman Islands:
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Electricity Cost: $0.433 USD/kWh
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Energy Mix: 97.4% diesel (2019), targeting 25% renewables by 2025.
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Why High?: Diesel imports, no grid connections, small scale. High living costs amplify impact.
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Comparison to UK: ~18% more expensive than UK. UK’s diverse mix and price cap keep costs lower; Cayman’s isolation drives reliance on costly diesel.
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Ireland:
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Electricity Cost: $0.40-$0.485 USD/kWh (Dublin: 49.9 c€/kWh, ~$0.553 USD/kWh in 2023)
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Energy Mix: 2023: 35% renewables (wind 30%), 50% gas, 7% coal, imports. Gas-heavy due to limited domestic resources.
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Why High?: Gas import reliance, data center demand, and limited interconnectors. Prices spiked 161% (electricity) and 353% (gas) since 2021.
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Comparison to UK: Up to 50% higher than UK’s $0.368/kWh. Ireland’s gas dependency mirrors UK’s, but fewer renewables and higher demand drive costs. UK’s coal phase-out and wind growth give it an edge.
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Key Comparisons
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Cost Rankings: UK ranks ~188th out of 194 countries for electricity cost ($0.368/kWh), near the top but below Solomon Islands ($0.56), Ireland ($0.485), Cayman Islands ($0.433), Denmark ($0.384), and Germany ($0.365-$0.404).
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Energy Mix:
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UK and Denmark lead in wind (29% vs. 40%), but Denmark’s higher renewable share (60%) reduces fossil fuel reliance.
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Germany’s renewable push (46%) is strong, but coal/gas reliance post-nuclear exit raises costs.
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Ireland’s gas-heavy mix (50%) and lower renewables (35%) make it less resilient than the UK.
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Solomon Islands and Cayman Islands depend on diesel, lacking UK’s diversified grid or renewable scale.
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Cost Drivers:
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UK: Gas price volatility, policy levies (25% of bill), and infrastructure constraints. Price cap limits spikes, unlike Ireland/Germany.
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Solomon/Cayman Islands: Isolation and diesel reliance; no price regulation.
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Germany/Denmark: High taxes and grid costs, despite renewables. Denmark benefits from interconnectors, unlike UK’s island limits.
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Ireland: Gas dependency and demand (e.g., data centers) outpace renewable growth.
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Affordability: UK bills (£1,849/year) are high but lower than Germany/Ireland when adjusted for purchasing power. Solomon/Cayman face extreme affordability issues due to income disparities.
Why UK Prices Are High but Not Highest
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Gas Reliance: UK’s 27-30% gas share ties electricity prices to volatile global markets, unlike Denmark’s hydro/nuclear-heavy neighbors (e.g., Norway).
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Infrastructure: Limited interconnectors and grid congestion raise costs, but less severely than isolated islands like Solomon/Cayman.
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Policy Costs: Green subsidies add ~25% to bills, similar to Germany/Denmark, but UK’s price cap softens impacts compared to Ireland’s unregulated market.
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Renewables: UK’s 37-45% renewable share (vs. Germany’s 46%, Denmark’s 60%) reduces gas exposure but not enough to match low-cost hydro/nuclear countries (e.g., Norway, $0.15/kWh).
Outlook
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UK: Prices may fall 7% in July 2025 (£1,720/year), but volatility persists. Scaling wind/solar and storage could lower costs by 2030.
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Others: Germany/Denmark may see relief with renewable expansion; Ireland needs more wind; Solomon/Cayman face structural challenges without major renewable investment.
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Solutions: UK could reduce costs via grid upgrades, battery storage (6 GWh in 2023, insufficient), and moving levies to gas/taxation.
For real-time UK energy mix updates, check National Grid ESO’s dashboard. For global price comparisons, refer to sources like Statista or GlobalPetrolPrices.com.
The UK Department for Energy Security and Net Zero (DESNZ) has confirmed that the upcoming offshore wind auction will be set in August.
The prospective commencement date for the Contract for Difference (CfD) Allocation Round 7 (AR7) is August 7, with applications being received until August 27.
The upcoming round could be one UK’s most important ones as Offshore Energies UK already revealed that the country is not on track to meet its Clean Power 2030 target of between 43 and 51GW of offshore wind capacity.
The organisation stated that the UK needs to secure 8.4GW of new offshore wind capacity in the AR7 round if it wants to stay on course for hitting its desired targets. That big of a number would make AR7 the biggest in history.
Results from the auction are expected between December 2025 and February 2026. The Department also separated offshore wind from other technologies, streamlining the approval process.
Provisional delivery years for fixed and floating offshore wind have also been set. The projects should be delivered in 2028-29 for fixed and 2029-30 for floating wind. Final confirmation of the delivery years will be confirmed before the round opens.
The UK set out a budget of £20.1m ($27.2m) per GW of capacity applying for a Clean Industry Bonus, with a total budget of more than £544m ($736m).
The government is also considering allowing fixed-bottom offshore wind projects that have not received planning consent to be part of the tender.
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