If net zero is going to remain politically viable, it must not just work in theory but must also be felt by the public. People need to see tangible benefits from the transition, and nowhere is that more immediate or impactful than in their energy bills. The promise of lower household costs was central to public buy-in for net zero, but for too many, those savings remain theoretical.
With bills continuing to rise, a growing number of people feel like they’re paying more and getting less. That perception – however inaccurate – is being increasingly exploited by those seeking to dismantle the UK’s climate commitments.
Criticism of Net Zero is Growing Louder
Although net zero continues to enjoy broad public support as a long-term economic goal, it has faced mounting scrutiny in recent months from across the political spectrum – driven both by rising political pressures and, in some instances, by concerted efforts to discredit the policy entirely.
Reform UK, under the leadership of Nigel Farage, has pledged to “wage war” on what it calls the “lunacy” of net zero as one of the party’s core policies. The party falsely claims that renewable energy is to blame for rising energy bills, and its deputy leader, Richard Tice, has vowed to use “every lever” to block renewable developments in the ten council areas it now controls following this month’s local elections. Farage claimed he would save a whopping £225 billion over the course of a Parliament by scrapping it, to use on other policies like tax cuts and axing the two-child benefit cap.
These attacks are often riddled with misinformation. They wrongly link high energy prices to green investment when, in fact, the primary culprit is the UK’s flawed electricity pricing system. Yet their appeal is not hard to understand. The public was promised that the transition to clean energy would lead to lower bills, but so far, most people haven’t felt those benefits.
Reforming the Marginal Price Mechanism
Ahead of May’s local elections, the Tony Blair Institute warned that the government must “reset” its approach to the transition or risk losing public support. Its report highlighted a dangerous gap between policy ambition and practical delivery, warning that the public needs to see and feel the benefits of net zero for it to remain politically sustainable. That warning was amplified when Tony Blair himself was criticised for suggesting that the government’s current climate strategy was “doomed to fail.”
This intervention speaks to a broader point: if the government is serious about maintaining public and investor confidence in the transition, it must urgently deliver on one of net zero’s core promises, which is lower energy bills. A good place to start is the Marginal Price Mechanism (MPM), a little-understood but deeply influential part of the electricity market that currently undermines the economic case for renewables.
Most people assume that when wind and solar produce cheap electricity, bills should go down. But under the current system, that rarely happens.
Under the MPM, wholesale electricity prices in the UK are set by the most expensive source of energy needed to meet demand which is typically natural gas. While gas plants generate only about 30% of Britain’s electricity, they set the wholesale price 98% of the time. This means that even when renewables supply the majority of electricity, consumers still pay the gas-based rate.
The system persists largely because it provides revenue certainty to energy providers by guaranteeing a minimum return on investment. This was especially important in the early stages of market liberalisation and remains a significant factor in project financing. But what worked for fossil fuels decades ago is increasingly unfit for today’s energy mix.
What’s more, this flawed setup produces perverse outcomes: there are times when the grid pays wind turbines to switch off because it’s too windy, while simultaneously paying gas generators to fire up. The website wastedwind.energy illustrates this contradiction with daily data.
As a result, the financial benefits of renewables are not reflected in people’s energy bills and the perception that clean energy is driving up costs, while false, could be allowed to spread unchallenged.
Splitting the electricity market so that renewable electricity is priced separately from fossil fuels would allow consumers to directly benefit from cheaper green energy. It would demonstrate that renewables are not just good for the planet, but good for people’s pockets too.
The previous government considered severing the link between gas and electricity prices through Review of Electricity Market Arrangements (REMA). But those proposals have since been sidelined, with the focus shifting instead to more limited reforms such as regional pricing.
That’s a missed opportunity. It has been suggested that reintroducing plans to end gas-based pricing could already save around £2 billion annually – equivalent to approximately £23 per household – with potential savings increasing as more renewable infrastructure is deployed.
The longer the government fails to demonstrate the benefits of the net zero transition, the more space there is for misinformation to flourish. Reform UK’s arguments may be misleading, but they will continue to resonate if the government doesn’t fix the system that allows them to sound plausible.
Of course, there is no silver bullet to ensuring the public feels the benefits of net zero, and reforms will involve trade-offs. But to keep it politically viable, the public needs to feel that the transition is working for them. Overhauling the Marginal Price Mechanism won’t solve every challenge, but it would be a powerful step in making the benefits of clean energy more visible, tangible, and defensible.Find out more about our work on net zero
