UK could save £320 billion on energy. Controversial report points to a different path

An alternative path for the development of the UK’s energy sector could reduce system costs by more than £320 billion by 2050, according to an analysis by the think tank Onward. The report’s authors propose a greater role for nuclear power and gas, alongside less support for wind and solar energy. The debate over the potential savings has become a key point of political contention between the centre-right and the UK government, which disputes the calculations.

£320 billion in savings: what are Onward’s calculations based on?

Onward has published a report titled “Firm Foundations”, prepared in collaboration with the consultancy Transira Energy. The organisation compared the current direction of the energy transition with an alternative scenario for the development of the energy system.

According to the authors, the second option could save more than £320 billion by 2050. This would reportedly be equivalent to around £540 per household per year.

The report proposes gradually phasing out subsidies for new wind and solar power plants from the early 2030s onwards. At the same time, nuclear power, gas and other renewable energy sources would play a greater role.

Onward estimates that electricity under this scenario would be around one-fifth cheaper in 2035. By 2050, the difference would reportedly increase to almost one-third.

The greatest savings would come from grids, not power plants

The most interesting aspect of the report concerns not the scale of the savings, but their expected source. More than half would come from lower spending on grids, power lines and connections for new generating facilities.

The argument is that a large share of distributed wind and solar generation requires the expansion of transmission infrastructure. This is compounded by the cost of ensuring sufficient capacity during periods of lower renewable energy output. This is where the report moves beyond a simple discussion of the price of a single megawatt-hour.

The cost of an electricity system includes more than power plants. It must also cover grids, balancing, reserve capacity and the management of periods of excess generation. According to Onward, the current approach focuses too heavily on the costs of generation itself and not enough on integrating those sources into the system.

More nuclear power and gas, but with a clear predominance of clean energy

The alternative scenario does not propose abandoning renewable energy altogether. In fact, it does not even call for a substantial reduction in its use.

The report states that, in 2050, electricity in the UK would still be almost 80% clean. However, the system would make greater use of nuclear power and gas. This reflects a growing debate about the cost of integrating large volumes of weather-dependent generation.

The UK aims to achieve a clean electricity system by 2030. Renewable energy sources currently account for around 66% of the country’s electricity generation.

Government disputes the calculations as report becomes a weapon for the Conservatives

Onward’s calculations are not an official forecast produced by the UK regulator or the system operator. The think tank has links to the centre-right, and the report has received the backing of the Conservative Party.

The Times reports that the Conservatives are using its findings to criticise the Labour government’s current energy policy. Under the Clean Power 2030 plan, the UK government is pursuing the opposite approach. It wants to accelerate the development of domestic renewable energy sources while expanding the grid and increasing system flexibility. The government argues that reducing dependence on fossil fuels will make consumers less vulnerable to fluctuations in global gas prices.

The future direction of the UK’s energy sector has become a key political dividing line. However, the dispute is not about whether wind and solar power are cheap or expensive. It focuses on which energy mix delivers the lowest total system cost once grids, reserve capacity, balancing and security of supply are taken into account.