Energy Bills Could Surpass Crisis Levels - But Who Is Really Paying for the Transition?
Chris O’Shea, chief executive of Centrica (the parent company of British Gas) has warned that UK electricity bills could be higher by 2030 than during the 2022 energy crisis. This should definitely give policymakers and consumers pause.
O’Shea made the comments at a recent energy sector event hosted by the Energy Institute, highlighting structural investment costs rather than short‑term wholesale price swings.
During the peak of that earlier crisis following Russia’s invasion of Ukraine, UK households and businesses saw unprecedented rises in energy costs, largely driven by wholesale gas prices.
This time, the warning is different.
The concern is not primarily volatile fuel markets, but the cost of rebuilding and modernising the UK’s energy infrastructure.
The Real Driver: System Costs
According to Centrica’s leadership, future price pressures will come from:
Upgrading ageing grid infrastructure
Connecting new renewable energy projects
Expanding storage capacity
Investing in energy security
In short: the cost of transition.
The UK is moving toward a lower-carbon system. That requires significant capital investment. Networks need reinforcement. Interconnectors must expand. Smart systems must be deployed. Generation capacity must diversify.
None of this is cheap.
The key issue is how those costs are funded.
Currently, a large proportion of network and policy costs are recovered through household energy bills. That means consumers are not just paying for the energy they use, but for the transformation of the entire system.
The Profits Question
Here is where public frustration intensifies...
Over the past two years, several energy producers and suppliers have reported significant profits and in some cases record-breaking. While not all profits were generated at the retail level, the optics are difficult to ignore:
Households struggling with affordability
Companies reporting billions in earnings
Warnings that bills may rise again
From a market perspective, profits can signal investment capacity and resilience. Energy infrastructure requires stable companies with strong balance sheets.
But from a social perspective, many ask:
If the transition is essential and expensive, should households shoulder the majority of the cost while shareholders receive returns?
A Structural Issue - Not Just a Corporate One
It is important to distinguish between:
Retail energy margins (often regulated and relatively slim)
Upstream production profits
Network operator returns
Government taxation and levies
The UK energy system is layered and complex. The price a household pays is not determined solely by supplier profit.
However, the structure of cost recovery, especially the reliance on bills rather than general taxation is a political choice.
Infrastructure investment can be funded in multiple ways:
Through consumer bills
Through taxation
Through borrowing
Through public ownership models
Through windfall taxes
Each approach distributes the burden differently.
The Bigger Policy Question
The UK faces a genuine dilemma:
The energy system must be modernised.
Investment cannot be delayed.
Security and decarbonisation both require capital.
But affordability is now a long-term political issue, not a temporary crisis.
If bills in 2030 exceed those seen in 2022, the debate will not centre on wholesale markets. It will centre on fairness.
Who funds the transition?
And how do we balance:
Energy security
Net zero ambitions
Corporate sustainability
Household affordability
The warning from Centrica is less about panic and more about structure.
The uncomfortable question is whether the current funding model remains socially and politically sustainable.
The Impact on Business and Investment
Much of the public discussion focuses on household affordability. But sustained high energy costs also reshape the business landscape.
For energy-intensive sectors - manufacturing, hospitality, logistics, food production - energy is not a marginal overhead. It is a core input cost.
When energy prices remain structurally elevated:
Operating margins compress
Cash flow becomes less predictable
Investment decisions are delayed
Business valuations adjust
For SMEs in particular, prolonged energy pressure can mean the difference between growth and stagnation.
From a transaction perspective, buyers are increasingly stress-testing:
Exposure to energy volatility
Efficiency of premises
Long-term supply contracts
Ability to pass on cost increases
Energy is no longer just an operational line item. It is part of the due diligence conversation.
If bills remain elevated into 2030 - not because of crisis but because of structural system costs - this becomes a permanent feature of business modelling.
The energy transition is not only a policy challenge. It is a competitiveness question.
How the UK funds and structures its energy system will directly influence:
SME resilience
Industrial competitiveness
Investment appetite
And ultimately, economic growth
Navigating rising energy costs, both for households and businesses is complex, but understanding their impact on business value, investment decisions, and market opportunities is essential. As experts in business energy, we help businesses assess these risks and make informed strategic decisions.