Merryn Talks Money The Real Reason UK Energy Prices Are Skyrocketing
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Sep 15, 2025 Dieter Helm, a Professor of Economic Policy at the University of Oxford and a leading thinker on sustainability and energy economics, tackles the pressing issue of skyrocketing UK energy prices. He delves into the disconnect between political ideology and economic reality in energy policy. Helm explores the complexities of the UK's net zero goals and how they contribute to rising electricity costs. He calls for a pragmatic approach to energy sustainability, emphasizing the urgent need for government action to mitigate consumer burdens while transitioning to renewable sources.
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Unilateral Net Zero Raises Costs
- The UK pursued a fast, unilateral net-zero path focused on territorial emissions rather than consumption-based emissions.
- That choice helps explain why UK electricity costs sit at the high end among developed countries.
Territorial Metrics Mislead Climate Action
- Measuring emissions territorially misleads because climate impact depends on atmospheric concentrations, not where emissions occur.
- The UK's de-industrialisation makes consumption-based emissions particularly relevant.
Renewables Drive Higher Capacity Needs
- Rapidly replacing fossil generation with wind and solar forces much higher total capacity and bigger transmission systems.
- Intermittency and geographic dispersion drive the need for duplicate capacity and costly grid upgrades.
