British Gas boss: Electricity will cost more in 2030 than during Russia crisis

Jonathan Leake

Wed, February 11, 2026 at 3:00 PM GMT+9 5 min read

Ed Miliband has pledged to slash energy bills by £300 - Thomas Krych/Anadolu via Getty Images

Electricity in Britain is on track to cost more in 2030 than it did during the energy crisis triggered by Russia’s invasion of Ukraine, the boss of British Gas has warned.

Chris O’Shea said “system costs” were expected to push up power prices for the rest of the decade as the Government oversees a huge upgrade of the electricity grid to prepare for net zero.

He told a London energy industry conference: “Our projections show that the UK energy system will be one where by 2030 the electricity price will be higher than it was at the peak of the Russian invasion of Ukraine.

“A third of the cost of that electricity [by 2030] will be wholesale costs, and the other two thirds will be system costs.”

Chris O’Shea, the British Gas chief, said “system costs” were expected to push up power prices for the rest of the decade - Jason Alden/Bloomberg

The warning suggests that Ed Miliband’s pledge to slash energy bills by £300 is dead in the water, unless levies on energy bills used to fund grid investment are moved to taxation.

Average power bills jumped from £717 a year in 2021 to £1,200 in 2023 after Russia’s invasion of Ukraine triggered a spike in gas prices. The 2023 figure would have been much higher – more than £2,000 for electricity alone – but the Conservative government capped it to protect consumers. Even this was not enough to stop household energy debts soaring from £1.8bn then to nearly £5bn now.

The current price cap stands at £1,758 a year for a typical household that uses electricity and gas, but the Government is scrambling to bring costs down after making affordable energy a key manifesto promise.

However, energy bosses have warned that the decision to fund grid upgrades essential to net zero through levies on energy bills will make that nearly impossible.

Claire Coutinho, the shadow energy secretary, said: “Energy bosses have warned that gas could cost nothing in 2030 and bills would still rise because of all the costs of building more pylons, paying for back up, and paying wind farms billions to switch off when it’s too windy – all system costs that Ed Miliband is choosing to pile onto people’s bills.

“Britain cannot afford Ed Miliband’s obsession with net zero. Whether it’s for growth or for living standards we need to make electricity cheap by axing the Carbon Tax and scrapping Ed’s old rip-off wind subsidies to cut everyone’s electricity bills by 20pc.”

Richard Tice, the Reform UK energy spokesman, said: “The truth has been exposed by the British Gas boss. Our electricity bills could hit Ukraine like highs over the next few years. We have been lied to on a colossal scale and Miliband should resign.”

Speaking at the Energy Institute’s International Energy Week meeting in London, Mr O’Shea, who runs British Gas’s parent company Centrica, said heavy investment in Britain’s electricity network would be necessary even without net zero.

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‘Years of underinvestment’

He said: “Those system costs aren’t net zero costs. They are addressing years and years of underinvestment and whether we went for net zero or new fossil fuels, we would need to incur those system costs.”

System costs include the £90bn being spent on the UK’s high-voltage transmission grid between now and 2031. Another £22bn is to be spent on the lower-voltage distribution network that carries power from the transmission grid into buildings.

The UK’s transmission grid is run by three private monopolies: National Grid, covering England and Wales; SSE in northern Scotland; and Scottish Power in southern Scotland.

Critics say that such companies have for decades been focused on handing profits to shareholders rather than investing in infrastructure.

At the same conference where Mr O’Shea spoke, other energy leaders warned that Sir Keir Starmer’s pledge to make the UK an AI superpower also risked driving up energy bills.

Demand from data centres

Fintan Slye, the chief executive of the National Energy System Operator (Neso), said that the sheer scale of demand from data centres threatened to drive up prices and even put energy security at risk.

He said: “What we’re seeing is the emergence of load on the system at a scale of which just is unprecedented.

“If you put them in the wrong places, where you don’t have [power supply] flexibility, you’ll end up probably driving up prices and creating issues around security of supply.

“You see that happening in markets like Pennsylvania, in the US, where the emergence of data centres is causing really significant price spikes and other issues.”

Mr Slye was referring to the disastrous 30pc surge in Pennsylvania’s power bills last year that added $600 to the average household bill. It was caused partly by data centres and cryptocurrency miners connecting to an ageing grid, with more demand coming from surging numbers of electric vehicles.

Britain already has some of the world’s highest power prices, with industry paying 27p per kilowatt hour in 2024 compared with 16p in France and about 6p in America.

UK domestic prices are equally onerous at 30p per kilowatt hour, compared with 24p in France and 13p in America.

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