Comment by Tom Luff, Practice Manager (Electricity Markets & Policy) at Energy Systems Catapult.

If the UK wants households to switch to heat pumps, drive electric vehicles, and use smart, flexible appliances, then electricity must be cheaper. That message came through clearly in this week’s CCC Progress Report, which described cutting electricity costs as essential to meeting our Net Zero goals.

The government’s Clean Power 2030 target – to generate 95% of electricity from low-carbon sources by 2030 – is both urgent and stretching. But as David Joffe, chief energy system adviser to the Clean Power Mission Control, warned this week: “There are ways we can imagine doing this badly, and I think we have to guard against those.”

He is right. It’s not just whether we hit 2030 targets – it’s how. GB electricity prices are among the highest in Europe. And few risks loom larger than making electricity more expensive at the very moment we need consumers and businesses to electrify.

What can actually be done to reduce electricity costs

There are no easy wins here. There is no magic wire of cheap electricity that doesn’t involve trade-offs – any shift in who pays, or how, inevitably shifts the winning and losing compared to the status quo. But some interventions can help us lower system costs overall and distribute them more fairly, if we act carefully.

We can rebalance legacy policy costs, as recommended by the CCC. Right now, electricity bills carry the burden of funding historic renewable subsidies, while gas bills do not. Shifting these levies off electricity – potentially to general taxation using revenue from a carbon price on gas – could make clean power more affordable. This must be designed carefully: the government’s fiscal headroom is tight, and any reform should be targeted and protect low-income and vulnerable households from harm.

We must unlock demand-side flexibility. That means encouraging the uptake of smart tariffs, storage, and automation to shift demand away from peak times. While not a silver bullet, this can ease pressure on the grid and lower wholesale prices – particularly if we strengthen market signals, including through more granular locational pricing that reflects the true cost of electricity in different places.

Scaling up low-cost renewables will also help. Wind and solar offer cheap forms of new generation, and Contracts for Difference (CfDs) continue to deliver value for money. But unless we reform markets and retail arrangements to pass those savings through to consumers, much of the benefit could be lost in the system.

But we need to ensure that any savings or support reach those who need them most. Not every household can afford to shift energy use or invest in smart tech. That’s why reforms must be designed to prioritise vulnerable consumers – through targeted tariffs, smart subsidies, or locally tailored schemes that reflect real-world energy needs.

Be very careful what we add to the bill

Some of the decisions being made in the name of progress risk driving up costs in the short term – particularly for electricity.

Expanding the grid is essential. But if we build faster than demand materialises, or recover costs without care, we risk saddling households with the bill for infrastructure they don’t yet benefit from. This risk is particularly acute on the distribution network, where rapid upgrades to support heat pumps and EVs could significantly increase bills. A flexibility-first approach – making the most of both existing and new assets – can help manage this cost more efficiently. A recent report highlights the scale of investment needed and the importance of using flexible demand as a tool to defer or reduce costly network upgrades.

There’s also a danger in retail market stagnation. Without reform, piling new obligations onto suppliers risks pushing up prices and crowding out the very innovations – like dynamic tariffs and bundled energy services – that could help lower bills and engage consumers.

We can’t electrify Britain with expensive power

Net Zero isn’t just about carbon – it’s about people. Families deciding how to heat their homes or run their cars need clear signals and affordable options. Electricity must be cheaper, and support must be smarter.

We agree with David Joffe: better to fail well than succeed badly. But better still is to succeed wisely – by balancing ambition with design, and urgency with fairness.