Household electricity bills could rise by £264 to an average of £1,145 by 2030, driven by mounting net zero costs, according to a new report from Boston Consulting Group (BCG). The forecast comes despite the Labour government's cost of living pledges and follows warnings from Greater Manchester Mayor Andy Burnham about the financial pressures facing families.
BCG forecasts £264 bill increase by 2030
BCG's analysis, which assumes continued falls in electricity demand, projects that the average household electricity bill will increase by £264 by 2030, reaching £1,145. The consulting firm attributes the rise primarily to a spike in net zero spending, including network and policy costs.
Raoul Ruparel, from BCG, said: "There is a focus on the destination - how we will generate energy in the future - but that is less relevant if the path to get there is too costly." He added: "Britain isn't an outlier because our system is more expensive: it's largely because of how we've chosen to pay for it."
Network and policy costs under scrutiny
The report highlights rising network and policy costs as a key challenge. Dan Alchin, head of policy and regulation, and Matt Levenston, head of energy system analysis, warned: "Rising network and policy costs are one of the big challenges to delivering reductions in future electricity bills."
The report emphasises that "transparency and certainty matter", stating: "Households and businesses need confidence about the costs they are likely to face in the years ahead if they are to make informed decisions about their energy costs, let alone invest in heat pumps, EVs and other electrification technologies."
Call for greater transparency on costs
BCG said it "strongly supports transmission investment where there is a well-evidenced benefit to consumers", but added: "It is impossible for any individual or company to make a proper assessment based on the limited amount of information available."
The firm concludes: "Given the pressures on customers, we have a responsibility to ensure investment is efficient and does not place unnecessary burden on today's customers."
The report states: "While recent Government interventions have had material impact in the short term, the 2030 outlook is largely unchanged. This should not be surprising. As we said last year, there is no silver bullet for lower energy prices. If the new Government is serious about tackling energy costs, greater transparency about where bills are heading and why investment is needed is the first step."
It adds: "Faster electrification remains the UK's most credible long-term route to more affordable bills. In the meantime, we must do more to support those most in need."
Government defends cost of living measures
A Government spokesman responded: "Tackling the cost of living is a key priority for this government and we know families will be worried by the prospect of higher energy bills this winter."
The spokesman outlined current measures: "We're acting to give consumers breathing space with the cost of living – cutting VAT on electricity bills, ensuring around six million households get the £150 Warm Home Discount this winter, and making millions of homes cheaper to run through our Warm Homes Plan."
He concluded: "Alongside our efforts to support rapid de-escalation in the Middle East, we will do everything we can to shield consumers from global energy shocks and bring down bills for good."
