The Adam Smith Institute’s (ASI) Electricity Tracker reveals that UK industrial electricity prices are 81 per cent higher than in France.

These high industrial electricity prices mean that, in the UK, a large car factory, like Nissan, might spend £35m a year on electricity, but in France, they would pay £19m. ASI concludes that output in the UK’s most energy-intensive sectors has collapsed by 33 per cent since 2021 in part because of this.

Moreover, ASI believes that the UK's high prices are primarily caused by a toxic cocktail of low nuclear capacity, outdated pricing and net-zero subsidies.

ASI is calling for a radical overhaul of energy policy, including reforming nuclear regulations, abolishing wind subsidies and ending the ban on North Sea oil and fracking.

Since 1998, the UK’s nuclear output has collapsed by 60 per cent. While France maintained its nuclear fleet, the UK’s ban on fracking and the move to block new North Sea licenses have forced the country to import up to 63 per cent of its gas whilst not making any difference to the amount actually used.

Additionally, the UK’s heavy reliance on intermittent wind power has not lowered bills. Instead, taxpayers are hit three times. First, by direct subsidies, second, by curtailment payments, where wind farms are paid to turn off during oversupply, which further inflates the final bill for consumers, and third, because it drives up the cost of still-necessary gas backup.

As a result, the Institute is calling for:
• The abolition of subsidies, phasing out CfD and Renewables Obligation (RO) schemes
• Immediately lifting the ban on fracking and end the moratorium on North Sea drilling licenses.
• Deregulation of nuclear replacing As Low as Reasonably Practicable with a "proven design".
• Shifting to locational electricity pricing to incentivise power closer to where it is needed.
• Scrapping the Carbon Price Support tax to immediately reduce total bills by £1.3bn.

Commenting on the findings, Mitchell Palmer, Economist at the Adam Smith Institute, said: “Recent ASI research has shown how much of a drag high energy prices are on British growth. In particular, they undermine the survival of traditional British industries, such as advanced manufacturing and chemicals, and the growth of new sectors, such as AI data centres. Unfortunately, these new figures confirm that the situation is not getting better. Decades of mistaken energy policy consensus continue to wreak havoc on British industry.”

It is unlikely that the Energy Secretary would agree with the Institute.

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