NESO has released a new cost analysis exploring three possible pathways for the United Kingdom to meet its emissions targets, combining different levels of electrification, hydrogen, bioenergy and consumer participation. 

According to the analysis, the UK’s energy costs could fall from around 10% of GDP in 2025 to between 5% and 6% by 2050, even as overall energy demand increases.

This rise in demand is driven by population growth, rising GDP and the expansion of energy-intensive sectors such as data centres.

Across all scenarios, NESO finds a fundamental shift in where money is spent: costs move away from imported fossil fuels and toward domestic investment in clean electricity, modern networks and efficient electric heating. This transition reduces operating costs over time while delivering several wider economic and social benefits.

NESO notes that increasing investment in clean energy infrastructure does not just make the system cheaper; it also supports local job creation, improved air quality and better public health outcomes.

These co-benefits strengthen the case for a rapid and sustained transition toward a low-carbon energy system.

By outlining multiple viable routes to achieve emissions goals, the FES 2025 analysis reinforces a key message: decarbonising the UK is not only compatible with lower long-term energy costs, but can also build a more resilient, healthier and economically secure energy system.