A year after the Energy Crisis Commission (ECC) published its report, ‘Protecting the UK from a Future Energy Crisis’ [1], the Commission has provided an update on progress since the recommendations were made and challenges that remain. 

The Energy Crisis Commission said: “The Government should be commended for its ambitions to improve societal outcomes by transitioning to clean energy, and we have seen great progress and real commitment across the power sector.  This includes setting up Great British Energy, unblocking onshore wind, consenting projects that will power 7.5 million [2] homes, and reforming the planning process. These actions will help to secure billions of pounds of private investment in our energy system, which is vital for long-term resilience.

We also should be proud that the collaborative efforts of Government and industry mean clean technologies like heat pumps, solar and batteries are being installed at record levels. However, the Warm Homes Plan has still not been announced: it must be focused on making it easy for all homes to make the upgrades and changes they need, ensuring that low-income and vulnerable households are protected and prioritized. 

Without meaningful action on bills, both for households and businesses, the switch to electrification will stall. The Government is taking steps to boost our clean power capacity and insulate billpayers from volatile international prices again, with renewables already lowering the wholesale electricity price by around a quarter. But bills are high today, and people are unlikely to move to more efficient electric heating if it is more expensive.

The upcoming budget should include details on how the Government will reduce the ‘spark gap’ between electricity and gas, for example changing how fixed energy system charges are paid for, including shifting policy costs from bills to ensure schemes are funded in a more progressive way. The Warm Homes Plan should recognise it is essential that important energy efficiency schemes such as the Energy Company Obligation are retained. 

The urgency of this crisis has not abated; bills are still too high while geopolitical tensions and conflicts persist, and the impacts of climate change, such as flooding on food production, are increasingly harming the UK. We need a structural shift towards electrification and away from dependence on gas for power and heat. 

The fiscal environment is challenging, but it’s important to consider overall costs, both now and in the future. Without concentrated efforts now, the UK remains critically exposed to further energy market volatility and price spikes, which in turn could cost households, businesses and taxpayers billions of pounds more in the long-term.”

The ECC extends its deepest gratitude to its outgoing chair, the Rt Hon David Laws for his commitment. The Commissioners are:

• Louise Hellem, Chief Economist, Confederation of British Industry (CBI)
• Gillian Cooper, Director of Energy, Citizens Advice.
• Dhara Vyas, Chief Executive, Energy UK
• Adam Scorer, Chief Executive, National Energy Action (NEA)
• Jim Watson, Professor of Energy Policy, Institute for Sustainable Resources, UCL.

Background on progress and policies still leaving the UK at risk of another crisis

Executive Summary

One year after the publication of the Energy Crisis Commission’s (ECC) report, the UK continues to feel the impacts of the energy crisis. Electricity bills remain some of the highest in Europe, both domestic and non-domestic. While wholesale prices for oil and gas have fallen from their peak, gas price volatility has added around £7bn to household energy bills in the year since the Energy Crisis Commission warned that the UK is “dangerously underprepared”, the equivalent to over £300 higher for the average dual fuel household.

At the same time, investment costs for vital infrastructure upgrades and other policies are rising. It’s essential the UK invests in resilience to protect energy consumers from the volatility which occurs when reliant on global commodities in an unstable world. Therefore the imperative for the UK to secure reliable energy and protect consumers from future price shocks is as strong as ever. 

Since the ECC’s report, the government has made notable progress in key areas, particularly in the power sector. However, significant gaps and delays remain, particularly concerning demand reduction at scale, taking action to reduce bills and comprehensive support for households and businesses struggling with energy debt and high costs.

The Current Energy Situation

The UK is not out of the energy crisis that began around four years ago and was exacerbated by Russia’s invasion of Ukraine. While oil and gas prices have fallen from their crisis peaks, they remain volatile. In February 2025, UK wholesale gas spot prices reached a two-year high due to global uncertainty from ongoing conflicts and shifts in US energy policy and sanctions on Russia. Brent crude oil spot prices are slightly higher than pre-crisis averages, and UK gas spot prices are noticeably higher.

These elevated wholesale prices continue to have a direct impact on household and business bills. Although the Ofgem price cap fell slightly in July 2025, it rose again in October to £1,755 for a typical household. This would be approximately £550-£600 higher than pre-crisis levels. Businesses are also still struggling, with industry estimates from August 2024 suggesting they could be paying 70% more than they were before the crisis, and 4 in 10 businesses cutting investment in the past 12 months because of energy costs.

Forecasts indicate that prices will remain volatile, with no return to pre-crisis levels predicted in the near future. In April 2026, predicted rises reach £100 for the average domestic dual fuel bill, to fund upgrades in electricity and gas networks that will eventually lower wholesale prices and for normal operation and maintenance. 

In March 2025, the Office for Budget Responsibility (OBR) increased its forecast for average wholesale spot gas prices for the year by around a third (30%) and electricity prices by around a fifth (20%), signaling more bill rises are likely. This underscores the continued need for the UK to gain energy independence and protect consumers and businesses from future price spikes.

Progress Since the ECC’s October 2024 Report

The ECC’s October 2024 report made a series of recommendations to help the UK learn from the current crisis and mitigate future risks. Below is an update on the progress made.

Power Sector and Energy Markets

The government has made clear and positive steps towards some ECC recommendations in the power sector.

• Renewable Energy: Progress has been made in the rollout of renewable energy. The government has launched the seventh Allocation Round for the Contracts for Difference scheme, after previous years failed to maximise renewables development, with reforms it hopes will attract more bids, and the budget for offshore wind in AR7 is significant at £1.08bn as the government aims to secure more capacity. The new Planning and Infrastructure Bill is also set to cut grid connection waiting times and offer households hosting infrastructure a £2,500 payment over 10 years.
• System Operation: The National Energy System Operator (NESO), working with the government, has taken measures to reduce connection waiting times and will develop a spatial plan for new generation and transmission infrastructure. A decision has also been made to retain a national pricing model.
• Levies and REMA: Key reforms remain on hold. The government has not yet announced its plans for rebalancing policy costs on gas and electricity bills, which is hindering the shift to electrified heating. The ongoing Review of Electricity Market Arrangements (REMA) means long-term energy market reforms are still unclear. This lack of certainty is a barrier to investment in the energy sector.
• Regulation: In line with ECC recommendations, there have been developments regarding the energy regulator, Ofgem. Ofgem will require suppliers to offer zero or low standing charge tariffs, though the long-term impact of this change is uncertain. Ofgem has also introduced new checks to ensure suppliers have robust business models, aiming to prevent a recurrence of the mass supplier failures seen during the crisis.

Gas Demand Reduction

Positive steps have been taken to reduce household gas demand and shield consumers from future price volatility.

• Heat Pumps: The Clean Heat Market Mechanism has been introduced to encourage boiler manufacturers to install a rising proportion of electric heat pumps. However, a late-2024 government decision to reduce fines for non-compliance from £3,000 to £500 may undermine the scheme’s effectiveness. Uncertainty around future targets and a lack of publicly available data about the scheme’s current progress may hold back industry investment and consumer confidence. A public information campaign on decarbonising heating has been conducted, and the Boiler Upgrade Scheme has seen record installations.
• Insulation and Energy Efficiency:  In general, the first half of 2025 saw record levels of heat pumps, solar panels, and batteries installed in homes. Minimum energy efficiency standards for the private rented sector have been introduced, but the deadline has been delayed by two years to 2030. Similarly, although now introduced legislatively, the Future Homes Standard will not see higher standards in new builds until the late 2020s. 
• Until the Warm Homes Plan is published, the long term plan for heat pumps and other net zero technologies is not clear. It is important that Government policies prioritize affordability as well as decarbonisation, including lowering bills through measures like insulation to help those living in fuel poverty or low income households. Adding to this, uncertainty around the future of schemes like the Energy Company Obligation (ECO) risks damaging supply chains and keeping the most vulnerable households in colder homes.

Household and Business Support Schemes

Households and businesses continue to face significant financial strain.

• Households: Over a third of households (36%) spent more than 10% of their income (after housing costs) on energy in 2024. While the ECC welcomed the government’s crisis-era support, these schemes have largely ended. 
• The removal of the Winter Fuel Payment for most pensioners in winter 24/25 may have negatively impacted some households, although the government has since re-extended support to more pensioners. It has also expanded access to the Warm Home Discount to more households on means-tested benefits, but has not increased the size of the rebate.
• Additional support, such as a social tariff, should be targeted at those who are struggling most with energy costs, like households with children – particularly single parent families – and disabled people. These groups will continue to face significant financial stress unless further action is taken.
• Debt: Energy bill debt has reached a record of over £4 billion, with the start of a long-term plan in place to address it, such as cancelling debt for means-tested customers, but more needs to happen to ensure the high levels of debt are reduced. Over 1 in 10 (14%) of GB adults think it is likely that they will go into debt to pay their energy bills, according to polling by YouGov for NEA. There’s been no significant progress on a targeted social tariff for low-income households. 
• Businesses: Businesses continue to face high bills and uncertainty. Cornwall Insight estimates that small industrial businesses could be facing bills over 50% more than pre-crisis levels even in 2026-27. Statistics show that many businesses are still struggling, with 4 in 10 cutting investment in the past 12 months because of energy costs.
• Industrial Strategy: The government has released a new Industrial Strategy, including a Clean Energy Industries Sector Plan. The new British Industrial Competitiveness Scheme (BICS) is intended to reduce electricity costs for around 7,000 energy-intensive businesses by up to 25% from 2027 including compensation for 90% of network costs. This is a significant expansion from the previous British Industry Supercharger, which covered only around 300 businesses. However, this scheme will not tackle high wholesale prices, which are the main component of bills and remain a struggle for many businesses, or help those not eligible for the narrow support criteria, such as at-risk industries like ceramics. On top of this, because of the funding model, ineligible businesses fund the support for others.

References

[1] https://energycrisiscommission.uk/the-report-2/

[2] https://www.gov.uk/government/news/government-has-approved-enough-clean-energy-to-power-75-million-homes

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