An Open Letter to Greg Jackson
The boss of Octopus Energy says the remedy for the developed world’s most expensive electricity is to build more of it. I checked the arithmetic.
RICHARD LYON
Dear Greg,
Thank you for your email of 15 June, in which you let me know that the developed world’s most expensive electricity is about to cost me 13% more. I was grateful, too, for the explanation that came with it: that the remedy for expensive electricity is to do more of the things that made it expensive.
I read it closely. You make three arguments. None of them survives contact with the data your own industry publishes.
Your first argument is that gas has let us down. You write that ‘dependence on gas and oil has let Britain down once again’. But gas sets our electricity price for a reason your email leaves out: it is what keeps the lights on when the wind drops. The turbines have not replaced the gas fleet; they have been built on top of it. We pay to build and subsidise the wind, and we pay again to keep the gas standing by for the still, cold evenings when the wind delivers almost nothing. Two parallel systems, one bill. That is the cost of asking an intermittent supply to do a job it cannot do on its own.
Your second argument is that the rules should change, so that gas ‘stops setting the price’. Here you are arguing against your own scheme. Under the Contracts for Difference that fund Britain’s new offshore wind farms, consumers do not pocket a dividend when the wind blows and power is cheap. They pay a fixed strike price, agreed years ago and locked in for fifteen. Across a decade of that scheme, consumers have paid roughly £14 billion more than the same electricity would have cost from the gas fleet we already owned. I have charted that gap, year by year, here. Even at the height of the 2022 crisis — the one event the scheme was supposedly built to protect us from — renewable power under contract still cost more than the gas it was meant to replace. The policy sold as a shield against gas prices took the ceiling of the crisis and made it the floor of the bill. It turned an occasional gas-price crisis into a monthly subsidy crisis — one that falls due whatever the weather, whatever the wholesale price is doing.
Your third argument is that the way out is to go electric. You invite me to buy a heat pump, solar panels and an electric car, and so free myself from fossil fuels. But a heat pump runs on electricity, and your own postscript explains that gas sets the electricity price — the half-hourly auction, you write, lets the most expensive unit set the price we all pay. This is not an escape from gas. It ties you more tightly to the gas-set electricity price — the very thing you say is broken, and are lobbying the government to change.
A word, too, on the reassurance that most of us ‘won’t feel much difference’ this summer, and may even spend £15 a month less. Of course we won’t. Nobody heats their home in July. You are comparing summer with spring and offering the season back to me as a saving. Your own postscript is more honest: it warns the winter ahead could be ‘dramatic’. In a country that records tens of thousands of excess winter deaths a year — the old and the poor worst hit — ‘dramatic’ is the optimistic word for it. As for the lowest standing charges of any large supplier — I don’t doubt it. But the standing charge is a rounding error against the levies and policy costs now loaded onto every unit of electricity we buy.
And these costs appear to be made hard to find on purpose. They are scattered across a dozen schemes and levies, many of them buried in indirect charges, and the government totals them nowhere. That is why I built subsidyclock.co.uk: to pull every one of them into a single live figure, each traced to an official source, every step of the arithmetic open to inspection. Some £109 billion has come straight off our electricity bills. Add the costs that reach us less visibly — through taxation, and the higher prices that carry the network, balancing and carbon charges — and the total passes £220 billion. The meter has not stopped since. Watch it run, and decide for yourself whose figures to trust.
Here is what I think your email misses. The public has worked this out. People are tired of being told, year after year, that the cure for expensive energy is another helping of what made it expensive. They would like the facts. So I wrote them down.
The Energy Trap: Why the Renewable Energy Transition Can’t Work — And What Can sets out the engineering, the physics, and the economics the press releases skate over, and what an honest energy policy would do instead. It is published in September. A good many of your customers would find it clarifying.
In the meantime, I would be delighted to put these arguments to you in public: on a stage, in front of an audience, at a time and place of your choosing. You have a large platform and a confident case. So do I. Let your customers watch us test both.
Yours sincerely,
Richard Lyon
Edinburgh
This article (An Open Letter to Greg Jackson) was created and published by Richard Lyon and is republished here under “Fair Use”
RELATED:
Interesting new initiative from @RichardLyon_ (with a small amount of help from me). Real time view of how much renewables subsidies (£108bn and counting) and grid integration are costing us. Link in reply. pic.twitter.com/fV9PmGsNZx
— David Turver (@7Kiwi) June 18, 2026
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Britain will need up to £240bn of net zero upgrades
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Britain’s electricity network will require up to £240bn of upgrades to support clean power targets, the Department for Energy Security and Net Zero (DESNZ) has admitted.
In new estimates released by the Government, the cost of building new pylons and power lines will skyrocket in the next 24 years to achieve the Government’s net zero ambitions.
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However, the latest forecasts indicate that this is just the start of a much larger upgrade programme – with households poised to foot the bill.
The costs of grid expansion are loaded onto consumers’ energy bills to pay for upgrades carried out by the UK’s monopoly transmission operators: National Grid, SSE and Scottish Power.
This includes building new pylons across the country to transport electricity generated by renewables, including rural wind and solar farms.
The scale of the upgrades was revealed at a conference this month, attended by officials from DESNZ.
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The UK’s average electricity demand was 40 gigawatts (GW) in 2025, but this has since fallen to 31GW. The UK recently recorded its lowest ever demand of just 12GW.
Despite this, DESNZ and the National Grid still expect a surge in electricity demand in the coming years as part of their efforts to decarbonise the grid…
David Adkins, at the National Grid, said this week that power demand could soon be even greater than predicted by DESNZ because of the growth of AI.
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Mr Miliband’s focus on net zero, despite the costs it is imposing on UK households and businesses, has become politically contentious.
Before the 2024 election, the main UK political parties largely agreed on climate change and the policies needed to tackle it.
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The Telegraph: continue reading
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