The 2028 Tipping Point: When Clean Power Becomes Britain’s Economic Advantage
Author: Matt Parry, Head of Energy Demand and Power
Britain has an uncomfortable distinction: some of the highest electricity prices in Europe. While it is easy to blame renewable energy, that diagnosis is wrong.
The structure of Britain’s power market means wholesale gas prices set the electricity price for much of the day. When gas spikes, as it did after the Russian invasion of Ukraine and during recent geopolitical tensions, household and industrial bills rise with it. The £44 Billion Treasury spent shielding consumers during the energy crisis was the fault of overexposure to volatile gas markets. Meanwhile, over half of the UK’s electricity now comes from renewable energy. Globally, capital flows into clean power at an estimate twice the rate of fossil fuels. Two recent developments bring this into focus.
Firstly, the latest round of the UK’s Contracts for Difference scheme has delivered more than 6GW of new onshore wind, solar and tidal capacity across Great Britain. These numbers matter for policymakers and corporate buyers alike; they provide long-term price certainty, lowering the cost of capital and insulating generators from wholesale volatility. Secondly, GB Energy and ministers have proposed the Local Power Plan, a £1 Billion public investment designed to fund community owned clean projects – a practical intervention to anchor value locally and reduce bills.
It costs more to build any form of new energy capacity in today’s world for a number of reasons: rising cost of capital, tight supply chains, geopolitical risk and the fact that new gas plants cost far more than those built five years ago. That is precisely why the quality of analysis now matters more than ever. Much of the public conversation still leans on levelised cost of energy (LCOE) comparisons. LCOE has value and the most recent CfD results made clear that new wind and solar are half the price of new gas plants. However, LCOE also does not capture the full system costs associated with integrating any energy source: grid reinforcement, storage, balancing services and transmission upgrades. Nor does it account for the macroeconomic impact of fossil fuel imports, the negative health impacts of burning them, or the labour market effects of domestic supply chains.
When those wider factors are included, the picture changes. Analysis from the Renewable Energy Association compares two plausible futures: one aligned with Clean Power 2030, and one where no new renewables are built and gas fills the gap. The modelling points to a clear inflection point around 2028 to 2029. From that point onwards, renewables become the net economic winner, even before factoring in the strategic value of reduced gas exposure or cleaner air.
In the Clean Power scenario, annual investment of around £40 billion through 2030 scales up wind, solar, storage and grid infrastructure while pushing unabated gas to a marginal role. The alternative appears cheaper upfront but locks the UK into higher ongoing costs through additional LNG imports and continued exposure to international markets. Crucially, the renewables pathway is also a jobs strategy. Modelling suggests nearly 145,000 new roles between 2024 and 2030 under a Clean Power trajectory, spanning engineering, electrical work, operations and maintenance.
There’s no pretending bills aren’t too high. They are. And stacking policy costs onto
electricity rather than spreading them through general taxation has only added to the strain. Rebalancing levies on to general taxation would make decarbonising fairer for all while we finish upgrading the system. It’s also reasonable to ask whether the CfD framework, while very successful and a brake on consumer bill impacts, is incentivising the full mix of renewable technologies, including firm low-carbon bioenergy power, geothermal and marine technologies. But the bigger point is straightforward: we cannot control global gas prices but we can reduce their grip on our market. If we succeed, the debate over whether renewables push bills up will fade. The real question will be why we clung to imported gas for so long.
About Matt Parry:
Matt Parry is Head of Energy Demand and Power at the Renewable Energy Association (REA), where he leads strategic analysis across power markets and the energy transition. He also serves as Secretariat to four of the REA’s flagship member forums: Solar & Storage, Decentralised Energy, Data Centre, and Finance & Insurance.
With more than 25 years’ experience across global energy markets, Matt has held senior leadership and advisory roles at the International Energy Agency, The Economist (as Chief Energy Economist), Energy Aspects (VP, Head of Long-term), Moody’s, KBC Group, Department for Energy Security and Net Zero, STX Group, and CRU Group. Notably, he built Energy Aspects’ long-term and energy transition service from inception into a market-leading analytical offering.
Matt has established and led high-performing analytical teams translating complex dynamics across renewables, power, hydrogen, gas, oil, and carbon markets into actionable intelligence for investors, policymakers, and corporates. His expertise spans quantitative modelling, policy analysis, scenario development, and strategic forecasting, including detailed energy demand outlooks to 2050 across more than 80 countries.