Energy UK report calls for lower electricity-to-gas price ratio

A new report from Energy UK, titled ‘Sparking Change’, argues that reducing the electricity-to-gas price ratio—known as the ‘spark gap’—is essential to making clean heat more affordable and accelerating electrification.

The report suggests that lowering this ratio could encourage 250,000 additional domestic heat pump installations by 2030. To achieve an interim target ratio of 3:1 by 2030, the industry proposes removing policy costs from electricity bills and moving them to general taxation or long-term financing mechanisms. Other recommendations include moving the gas standing charge to the unit rate by April 2028 and improving access to green finance.

Separate analysis from thinktank Nesta indicates that wholesale gas costs have driven nearly 90% of the rise in UK household electricity bills since 2020. The data suggests that rising gas prices, rather than net-zero targets, are the primary cause of high energy bills. The analysis notes that the UK remains highly exposed to gas price volatility because over 80% of households are connected to gas mains and the electricity system still relies heavily on gas as the marginal unit.