UK - Nesta has responded to the Budget announced by the Chancellor today, including reducing electricity bills, moving the Renewable Obligation policy costs on to general taxation and scrapping the Energy Company Obligation (ECO) policy costs.

Madeleine Gabriel, director of sustainable future at Nesta, said:

“In a Budget that could have been make or break for clean energy, the Chancellor is right to have focused on making electricity cheaper today. This will help all households in the country and will be particularly welcome to households on direct electric heating - many of whom are fuel poor - who will save around £250 per year. It will also reduce the difference between higher electricity and lower gas prices, which is now the largest gap since 2022.

"But there is more work the government will need to do to decisively tilt the scales in favour of affordable clean heating and with cuts to the Energy Company Obligation scheme, it needs to be clear how it will address fuel poverty. The Warm Homes Plan will be a pivotal point for the government setting out how it will upgrade fuel poor homes while ensuring the smartest choice for all is to switch away from fossil fuels.”

Notes to editors

1. For more information on the analysis or to speak to one of the experts involved, please contact Kieran Lowe, Media Manager, on 020 7438 2576 or [email protected]. Spokespeople are available for broadcast interviews.
2. Nesta estimates that the price gap between electricity prices and gas prices will be reduced by changes in the Budget from 4.7 in the price cap period from January to March 2026 to 4.3.
3. Nesta has estimated a saving of £250 on electricity bills for households using a storage heater based on the measures detailed in the Office for Budget Responsibility’s fiscal outlook. A household using 7.1MWh of electricity per year would save £185 from the reduction to the Renewables Obligation and £65 from the removal of the Energy Company Obligation.