Why is UK electricity so expensive?

Conflict in the Middle East has pushed up energy prices in the UK. Even if the war ends soon, prices may not return to pre-war levels, and government could still face pressure to support households. But the problem runs deeper than the current crisis. Even before the latest shock, the UK had some of the highest electricity prices in the developed world. Why is electricity so expensive here? How much of the problem is down to gas? Are renewables making bills cheaper or more expensive? And if government wants to cut electricity prices, what can it actually do? Helen Miller is joined by Dieter Helm, Professor of Economic Policy at the University of Oxford, and Peter Levell, Deputy Research Director at IFS, to discuss Britain’s energy mix, the costs of renewables, net zero targets, and how policy should respond to energy price shocks. Become a member: https://ifs.org.uk/individual-membership Find out more: https://ifs.org.uk/podcasts-explainer... 00:00 - Introduction 2:08 - What is happening to energy prices? 3:40 - Where does the UK get its energy from? 5:30 - How much more expensive is energy in the UK? 7:00 - The price cap 8:30 - Why does gas still affect the electricity price? 14:00 - Why do we still need gas? 17:00 - Taxes on energy 20:25 - Have renewables decreased prices? 22:40 - The costs of net zero 25:00 - Should we subsidise renewables 37:45 - What are the government's plans? 38:30 - Would we be less vulnerable to external shocks? 42:20 - How should government support households during shocks? 47:30 - Conclusion