Addressing the high price of electricity in the UK: A systems thinking analysis of inflated price formation
Published: 16 October 2024
Research insight
This report outlines how the UK can reduce consumer electricity prices, emphasising both technical factors and human behaviour in the electricity sector.
This report suggests how the United Kingdom might best reduce consumer prices for electricity.
This research relies on methods, tools, and heuristics from both hard and soft systems thinking. The electricity sector involves real-world technical elements with clearly-defined and easily quantifiable inputs and outputs (i.e., suitable for hard systems thinking), as well as more subjective aspects such as the decision-making and behaviour of human stakeholders and social groups (i.e., suitable for soft systems thinking).
Addressing the high price of electricity will accelerate the adoption of heat pumps and facilitate the decarbonisation of domestic heating in the UK. Furthermore, since decarbonisation is essentially an ‘electrification strategy,’ bringing down electricity costs bears upon the Net Zero project, writ large.
It is important to appreciate that although recent history has seen an unprecedented rise in electricity prices, the problem of high relative electricity prices reflects a long-term trend rather than a temporary crisis. Given the structural and systemic realities of the GB market, even after the immediate fuel crisis emanating from the Ukraine war has abated, it is unlikely this trend toward higher-than-necessary consumer prices will be reversed.
Download the full report on the UK Collaborative Centre for Housing Evidence website.
First published: 16 October 2024