Nearly 90% of the rise in UK electricity bills came from expensive gas, not renewables or network charges. That is the central finding of a Carbon Brief’s latest analysis, which unpicks a claim often heard on doorsteps and in Westminster: that green levies are to blame for high bills.
The numbers say otherwise. Gas is burned to generate electricity, and because gas plants are usually the most expensive units needed to meet demand, they set the price paid to all generators. When gas prices spiked after Russia’s invasion of Ukraine, that mechanism transmitted the shock directly to household electricity bills. Carbon Brief puts the contribution at nearly 90% of the total increase.
Why gas sets the price of your electricity
Britain’s electricity market works on a marginal-cost basis. Every half-hour, National Grid ESO matches supply and demand, and the most expensive generator needed sets the clearing price. In practice, that is almost always a gas plant. So even if wind and solar are producing cheap power, the price paid to all generators is set by the gas plant on the margin.
That is why the Carbon Brief Q&A on UK energy bills is so timely. It explains that the gas price crisis did not just affect gas bills, it flowed through into electricity bills too, because gas remains the price-setter for the whole market.
For a typical 3-bed semi using 2,900 kWh of electricity and 12,000 kWh of gas, the effect is stark. Ofgem’s price cap for October to December 2026 stands at £1,923 a year for a typical dual-fuel household. Analysts estimate that without the gas price spike, that figure would be hundreds of pounds lower.
What this means for a typical 3-bed semi
The practical lesson for homeowners is that relying on a gas boiler exposes you to two volatile prices at once: the gas you burn directly, and the gas that sets your electricity price. Insulating and electrifying your heating reduces both exposures.
Take a 3-bed semi with an EPC D rating and a 15-year-old gas boiler. Its annual gas bill at current capped rates is roughly £1,100. A well-installed air-source heat pump, combined with loft and cavity wall insulation, could cut that to around £700–£800 a year in running costs, depending on the tariff. The upfront cost is higher, typically £8,000–£12,000 before grants, but the Boiler Upgrade Scheme offers £7,500 towards an air-source heat pump in England and Wales.
Carbon Brief’s analysis also points to a structural fix: moving levies off electricity bills and onto gas, or funding them through general taxation. That would make electricity cheaper relative to gas and accelerate the shift to heat pumps. The government has consulted on exactly this, though no final decision has been announced.
The grant and EPC context the headlines miss
For homeowners, the most immediate lever is the Energy Company Obligation (ECO4), which funds insulation and heating upgrades for households on lower incomes or in fuel poverty. If your EPC is E, F or G, you may qualify for free or heavily subsidised measures. The Great British Insulation Scheme (GBIS) also offers support for cavity wall and loft insulation.
But the catch is that eligibility is tight and installer capacity varies by region. Carbon Brief’s Q&A notes that the UK has some of the leakiest housing stock in Europe, which makes the gas price shock worse: you pay to heat air that escapes through walls and roofs. Insulation is the first line of defence, and it is often the cheapest per tonne of carbon saved.
For those not eligible for ECO4, the Boiler Upgrade Scheme is the main grant. It is straightforward: apply through an MCS-certified installer, and the £7,500 is deducted from the quote. You do not need to pay upfront and claim back. The scheme runs until 2028, but budget is limited and allocated on a first-come, first-served basis.
What to do before the next price cap announcement
Ofgem announces the next cap on 23 November 2026, covering January to March 2027. Forecasts suggest a small rise, driven again by gas prices. Homeowners who act before winter can lock in lower bills and reduce exposure to the next spike.
Start by checking your EPC, it is free to view online and takes two minutes. If you are band D or below, book a retrofit assessment through your local authority or an MCS-certified installer. Ask specifically about loft insulation, cavity wall insulation, and whether a heat pump is suitable for your property. If you are on a low income, ask about ECO4 eligibility at the same time.
For those ready to replace a gas boiler, request quotes from at least three MCS-certified installers and confirm they are registered for the Boiler Upgrade Scheme. The grant is applied at the point of quote, so there is no paperwork to chase afterwards. Do it before the January cap takes effect, the savings start immediately, and the gas price risk disappears with the boiler.
Frequently Asked Questions
No. The grant is £7,500 towards an air-source heat pump in England and Wales, but installation typically costs £8,000–£12,000. You pay the difference, though the grant is deducted from the quote upfront.
Yes, because heat pumps are more efficient than gas boilers. Even at current electricity prices, a well-installed heat pump can run at lower cost than a gas boiler, and it removes your exposure to the gas price that sets electricity prices.
ECO4 targets homes with EPC bands E, F or G, and eligibility also depends on income or receipt of benefits. The Great British Insulation Scheme focuses on homes with EPC D or below. Check your EPC online first, then contact your energy supplier or local authority.
