Energy and Bill Reduction

The Problem

Britain has among the highest electricity prices in Europe despite generating increasingly cheap renewable power. The reason is structural: the wholesale electricity market prices every generator at the marginal cost of the most expensive source running at that moment, which is almost always gas. When gas prices doubled after Russia's invasion of Ukraine, British electricity bills doubled even though the wind kept blowing for free and nuclear kept generating at the same cost. Households are paying gas prices for electricity generated by wind and sun. This has to change structurally, not through one-off subsidies.

Separately, Britain imports roughly half its gas as expensive LNG, while the Bowland Shale beneath Northern England may contain 1,300 trillion cubic feet of gas. The 2019 fracking moratorium was imposed after a 2.9 magnitude tremor equivalent to a heavy lorry. The UK's seismic threshold of 0.5 is the most conservative in the world. The US operates at 4.0. There is a real conversation to be had about domestic gas production, and Forge has it honestly rather than pretending it does not exist.

A. North Sea: Drill for the Transition

New North Sea oil and gas licences issued where exploration is commercially viable and environmentally assessed. North Sea gas is substantially less carbon-intensive per unit than imported LNG, which must be liquefied, shipped, and regasified. Closing UK production while importing the equivalent from overseas increases global emissions. The honest environmental argument is for UK production with revenues ring-fenced to fund the transition, not for importing foreign gas and claiming climate virtue.

• Revenues from North Sea licensing and production taxed at an appropriate windfall rate and ring-fenced in the British Energy Sovereign Fund
• The Fund invests exclusively in renewable energy infrastructure, grid storage, insulation, and heat pump rollout. Fossil fuels fund their own replacement
• Existing licences honoured. New licences conditional on binding decommissioning plans with full financial surety

B. Council-Led Fracking With Community Profit Share

The 2019 fracking moratorium is lifted with realistic seismic thresholds (2.0 magnitude, compared to 0.5 today and 4.0 in the US). But fracking is not imposed on any community. It is opted into by each local authority, on their own terms.

• National opt-in register: a public database listing every council that has opted in, the profit-share percentage they have set, and available extraction zones. Operators bid only in registered areas
• Mandatory restoration bonds deposited before drilling begins. Full cost of site restoration guaranteed before a single drill bit turns
• Revenues flow to the British Energy Sovereign Fund alongside North Sea revenues

C. Marine Energy: Tidal and Wave

The Pentland Firth holds a quarter of Europe's tidal energy potential. UK companies (Orbital Marine Power, Atlantis Resources) lead the world in tidal technology. The resource is predictable, unlike wind and solar. The technology is ready for commercial deployment. What has been missing is the contract certainty that wind received through the CfD programme.

• Dedicated tidal and wave Contracts for Difference at a strike price that reflects the nascent industry's actual costs, not the now-mature offshore wind rate
• Target: 1 GW tidal operational by Year 5, 5 GW pipeline confirmed by Year 5
• Manufacturing and maintenance facilities at Caithness, Orkney, Shetland (tidal), and Morlais off Anglesey (tidal), with Bristol Channel wave potential progressed
• Real coastal engineering jobs in Scotland and Wales where the resource is strongest and the economic need is greatest

D. Solar Britain and Grid Storage

• 5 million homes with solar panels by end of parliament. Bulk government procurement at scale that the retail market alone cannot achieve, driving unit costs below 2,000 pounds for a standard domestic system
• 20 GWh of grid-scale battery storage installed over the parliament. Stores cheap renewable energy at midday for use at peak demand (6 to 8pm). Removes the need for gas peaker plants that run exclusively during those hours at enormous marginal cost
• Home battery plus solar package enables households to use cheap midday solar at night. Combined with fair export pricing (see below), households with both become genuine micro-generators

E. Small Modular Reactors

Rolls-Royce SMR has a mature design, UK nuclear safety assessment nearing completion, and a manufacturing plan centred on Derby, Rotherham, and Sheffield. A government commitment to 10 GW over 15 years (around 60 reactors at 470 MW each) gives the manufacturing certainty needed to scale production. Each additional reactor is cheaper and faster than the one before. The first 4 are ordered and contracted by end of parliament, with a long-term commitment to the full programme.

F. Decouple Electricity From Gas: Split the Wholesale Market

The Government's July 2025 REMA review rejected full market splitting in favour of incremental reform. Forge goes further. The structural problem requires a structural solution.

• Two wholesale pools instead of one. A low-carbon pool (wind, solar, nuclear, tidal) priced at its actual marginal cost of generation (near zero for renewables, low for nuclear). A thermal pool (gas, biomass) priced at marginal cost as today. Suppliers contract for both pools proportionally and pass through the blended price. As renewables grow, the low-carbon pool dominates and bills fall structurally
• Mandatory long-term Contracts for Difference for all existing subsidised renewables. Windfall profits above the strike price return to consumers via bill rebates, not shareholder dividends. The April 2026 voluntary Wholesale CfD programme is made compulsory for all generators receiving any public support
• Pass-through transparency on bills. Suppliers publish the proportion of each customer's bill attributable to low-carbon versus gas generation. As renewables grow, the numbers on bills must fall. Supplier margins cannot absorb the market improvement
• Clean kilowatt discount. Households on heat pumps, full electric heating, or documented 100% renewable tariffs receive a 15 to 20% unit rate discount. This reverses the current penalty on going electric, where switching off gas typically raises your total energy bill because electricity is taxed and priced at a higher per-unit rate than gas per unit of heat

G. Other Bill Cuts

• Move levies off electricity onto gas and general taxation. Around 160 pounds of the average electricity bill is policy levies funding past renewable subsidies and social tariffs. Almost none sits on gas. Rebalancing these reduces electricity bills by 160 pounds for typical households and raises gas costs modestly, making electric heating and heat pumps more economically competitive
• National insulation programme. Every home below EPC band C insulated over 5 years. Priority: fuel-poor households. Funded from energy company obligations (already collected), local authority capital, and a national mortgage-linked pay-as-you-save scheme at base rate interest repaid through bill savings. Saves 300 to 500 pounds per year per insulated household
• Standing charge cap. Standing charges have risen 80% in three years and now cost over 350 pounds annually before any energy is used. Cap standing charges at the genuinely fixed cost of network maintenance per meter, around 100 pounds per year. Other fixed cost recovery moves to the unit rate
• Fair solar export rates. The Smart Export Guarantee currently pays homes 5 to 15 pence per kWh exported, while suppliers charge 25 to 30 pence for the same electricity moments later. Mandate export pricing at a minimum of 70% of day-ahead wholesale rate