The UK Energy Research Centre published its Review of Energy Policy 2025 on 28 January 2026, an annual compendium of research findings on UK energy policy, written by Peter Taylor, Richard Carmichael and others1. The review covers electricity bills, the zonal pricing debate, consumer flexibility, the transition away from gas, critical minerals, biomass and public participation1.
On bills, UKERC states that typical electricity bills rose by £169 in real terms between 2021 and 20251. Of that increase, £112 came from wholesale fuel (gas) prices, which the review puts at 66 per cent; £28 came from increased network costs, 17 per cent; and £22 from policy costs, 13 per cent1. The remainder is attributed to wider factors arising from the energy crisis, including customer debt and supplier insolvency1.
| Driver of the £169 real-terms rise in typical electricity bills, 2021 to 2025 | Amount | Share |
|---|---|---|
| Wholesale fuel (gas) prices | £112 | 66% |
| Increased network costs | £28 | 17% |
| Policy costs | £22 | 13% |
| Wider factors, including customer debt and supplier insolvency | Remainder | Not given |
On market design, UKERC says its analysis in early 2025 showed that the risks created by zonal pricing would have driven up bids in auctions for offshore wind, and that the government decision against zonal, alongside other factors, contributed to the record offshore wind contracts auction in January 20261. On flexibility, it says the Clean Flexibility Roadmap provides groundwork for a flexible, low-cost, clean power system, but that action is needed on smart meter roll-out and half-hourly metering if consumers are to benefit from cost saving flexibility1.
The review also addresses the gas network, stating that it will be essential for many years to come even as gas consumption falls, and that it is essential to avoid high costs for vulnerable households left on the gas network1. It calls for the future gas policy review to consider all options, from connections reform to nationalisation, to ensure fairness1. On critical minerals, it describes the new Critical Minerals Strategy as a timely and important response to geopolitical risks affecting renewable energy, batteries and other clean energy solutions1. On biomass, it says forestry, agriculture and other biological sources can deliver controllable low carbon power and act as a stand-by energy store to complement wind and solar, as well as offering carbon removal, but that sustainability concerns must be addressed and further policy support is required1.
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Why it matters for households
The bill breakdown puts the largest share of the recent real-terms increase on wholesale gas prices rather than on network or policy costs, which means the cost of gas set the pace of the rise in electricity bills over the period covered1. For a household, that links the electricity bill to gas market conditions even where the home itself is heated and powered by electricity.
The flexibility findings bear on whether a household can shift consumption to cheaper periods. UKERC's position is that the cost saving potential depends on smart meter roll-out and half-hourly metering, and that progress on both has been slow1. The gas network findings concern homes that remain connected as consumption falls, and the review flags the risk of high costs falling on vulnerable households left on the network1. Policy on these matters is set by the UK government department responsible for energy, with parts of buildings and energy policy devolved to Scotland and Wales; the review does not set out nation-by-nation figures.
What happens next
The review states that the future gas policy review must consider all options, from connections reform to nationalisation, to ensure fairness, but it does not give a date for that review1. It also states that further policy support is required for biomass, without specifying a timetable1. No dates for these next steps have been reported1.