Overview
- The Institute for Fiscal Studies and LSE published the Green Budget report on Sept 21–22, 2026, and concluded that making time‑varying tariffs the default could lower bills for many households.
- The study shows generation costs vary widely by time and place, with frequent strong winds in Scotland sometimes making power effectively free while the south of England pays for expensive gas generation.
- Authors recommend default time‑varying household tariffs and regionally targeted subsidies for heat pumps and solar, noting the UK Government has ruled out zonal or regional wholesale pricing.
- The report warns balancing costs to match supply and demand are projected to roughly double to about £7 billion by the end of the decade, raising pressure on bills unless system efficiency improves.
- Savings depend on consumers adopting electric vehicles, smart meters and automated charging or load‑shifting technology, and low‑income households will need policy protection to avoid unfair cost shifts.