Major shake-up of UK energy system could ‘lower bills for good’, government says
Plans to “green” the UK’s power system will protect consumers from future energy crises and has the potential to “bring down bills for good”, the government has said.
Achieving clean electricity by 2030 was a key election promise for the Labour party, and reiterated by Keir Starmer last week as he outlined government ‘milestones’.
To reach the target, ministers are working on a radical shake-up of UK energy and clunky planning systems, including at least doubling clean power sources.
It is hoped the plans will eventually lower bills by reducing the cost of electricity.
But the government could not say when electricity bills would fall, and it faces the risk that any benefits won’t be felt in people’s pockets until after the next general election.
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It also accepted that the massive amount of new infrastructure needed could bring difficult trade-offs, including impacts on communities and nature.
Energy secretary Ed Miliband said the government is “embarking on the most ambitious reforms to our energy system in generations”.
He added: “A new era of clean electricity for our country offers a positive vision of Britain’s future with energy security, lower bills, good jobs and climate action.”
What are the changes?
The government is aiming to get at least 95% of power from clean sources – predominantly wind, solar and nuclear – by 2030.
The target is five years earlier than the Tories’ plan for clean power by 2035.
To get there, the Clean Power Plan published today outlines a raft of far-reaching measures, including:
- at least doubling current offshore wind, onshore wind and solar power capacity
- fixing the “dysfunctional” system stopping clean power projects from connecting to the national grid
- speeding up planning decisions
- reviewing the judicial review system that can slow down developments
- creating benefits for communities living near new developments
- building 80 new infrastructure projects.
How will the changes impact bills?
Professor Rob Gross, who advised the government on the plan, said the plans should stabilise prices and protect consumers from future energy crises.
That is because clean electricity prices are fixed over several years, whereas international gas prices are volatile.
“If we get it right”, electricity prices will no longer be “driven up and down because a war has broken out somewhere else in the world”, said Prof Gross.
Ed Matthew from thinktank E3G, called it a “herculean mission” that could help lower electricity bills in the next five years, but only with a “major rewiring of the UK’s policy framework”.
He said bringing the deadline forward could push up some short term costs by stretching supply chains or pushing up demand.
Shadow energy secretary Claire Coutinho said the “rush to decarbonise the electricity system by 2030 will push up electricity prices and cause more hardship for people across Britain”.
What is missing from the plan?
Analysts also warned that “greening” the electricity network was only one part of the puzzle, as the government seeks to lower all energy costs and hit its climate targets.
Jess Ralston from energy think-tank ECIU urged ministers to speed up the installation of electric heat pumps to replace gas boilers, to “avoid being on the hook for expensive gas in future”.
The UK Energy Research Council said in a separate report this week that the 2030 target is “only the first step towards a more expansive vision for sustainable energy” in the UK.
If the government wants to reach its broader climate target of cutting emissions by 81% by 2035 – as announced at the recent COP29 climate summit in Azerbaijan – it must also clean up other sectors like heavy industry and transport, it said.
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There is “no doubt” the UK “will spend 3% of our GDP on defence” in the next parliament, the defence secretary has said.
John Healey’s comments come ahead of the publication of the government’s Strategic Defence Review (SDR) on Monday.
This is an assessment of the state of the armed forces, the threats facing the UK, and the military transformation required to meet them.
Prime Minister Sir Keir Starmer has previously set out a “clear ambition” to raise defence spending to 3% in the next parliament “subject to economic and fiscal conditions”.
Mr Healey has now told The Times newspaper there is a “certain decade of rising defence spending” to come, adding that this commitment “allows us to plan for the long term. It allows us to deal with the pressures.”
A government source insisted the defence secretary was “expressing an opinion, which is that he has full confidence that the government will be able to deliver on its ambition”, rather than making a new commitment.
The UK currently spends 2.3% of GDP on defence, with Sir Keir announcing plans to increase that to 2.5% by 2027 in February.
This followed mounting pressure from the White House for European nations to do more to take on responsibility for their own security and the defence of Ukraine.
The 2.3% to 2.5% increase is being paid for by controversial cuts to the international aid budget, but there are big questions over where the funding for a 3% rise would be found, given the tight state of government finances.
While a commitment will help underpin the planning assumptions made in the SDR, there is of course no guarantee a Labour government would still be in power during the next parliament to have to fulfil that pledge.
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From March: How will the UK scale up defence?
A statement from the Ministry of Defence makes it clear that the official government position has not changed in line with the defence secretary’s comments.
The statement reads: “This government has announced the largest sustained increase to defence spending since the end of the Cold War – 2.5% by 2027 and 3% in the next parliament when fiscal and economic conditions allow, including an extra £5bn this financial year.
“The SDR will rightly set the vision for how that uplift will be spent, including new capabilities to put us at the leading edge of innovation in NATO, investment in our people and making defence an engine for growth across the UK – making Britain more secure at home and strong abroad.”
Sir Keir commissioned the review shortly after taking office in July 2024. It is being led by Lord Robertson, a former Labour defence secretary and NATO secretary general.
The Ministry of Defence has already trailed a number of announcements as part of the review, including plans for a new Cyber and Electromagnetic Command and a £1bn battlefield system known as the Digital Targeting Web, which we’re told will “better connect armed forces weapons systems and allow battlefield decisions for targeting enemy threats to be made and executed faster”.
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PM Sir Keir Starmer and Defence Secretary John Healey on a nuclear submarine earlier this year. Pic: Crown Copyright 2025
On Saturday, the defence secretary announced a £1.5bn investment to tackle damp, mould and make other improvements to poor quality military housing in a bid to improve recruitment and retention.
Mr Healey pledged to “turn round what has been a national scandal for decades”, with 8,000 military family homes currently unfit for habitation.
He said: “The Strategic Defence Review, in the broad, will recognise that the fact that the world is changing, threats are increasing.
“In this new era of threat, we need a new era for defence and so the Strategic Defence Review will be the vision and direction for the way that we’ve got to strengthen our armed forces to make us more secure at home, stronger abroad, but also learn the lessons from Ukraine as well.
“So an armed forces that can be more capable of innovation more quickly, stronger to deter the threats that we face and always with people at the heart of our forces… which is why the housing commitments that we make through this strategic defence review are so important for the future.”
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