The letter landing on doormats and in inboxes this winter carries a number that will matter to almost every household in Britain. From January, energy bills could rise by more than a quarter, around £460 extra a year for the typical home, according to forecasts from the big suppliers British Gas, EDF and E.ON. For the second time in four years, a war thousands of miles away is arriving in the domestic budget, and the question of who protects families from the next shock has become one of the most consequential decisions facing the government.
The immediate cause lies far from British kitchens. Since US and Israeli strikes on Iran in February effectively closed the Strait of Hormuz, oil and gas prices have soared. Winter is expected to push them higher still, because demand for gas is rising just as Europe’s winter gas stores sit at their lowest level since records began in 2011. Behind all of this looms a larger threat: the warming climate. Cutting carbon emissions is essential to limit future warming, but keeping bills down while doing so is proving hard, and not only for the UK.
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Meanwhile, as world leaders gather this week in Antalya, Turkey, for COP31, the UN climate summit, that tension is playing out everywhere. Energy and climate policy has become the front line in a contest between the world’s two energy superpowers, with everyone else squeezed in between. America is betting on fossil-fuel molecules, pumping record volumes of oil and gas and pressing allies to buy them. China is betting on electrons, flooding the world with the solar panels, batteries and electric cars that can replace those fuels. Which bet wins will shape both what the world pays for energy and how fast emissions can be cut.
Few countries are more exposed than the UK. Gas heats most homes and, much of the time, sets the wholesale price of electricity. The last shock, after Russia’s invasion of Ukraine, cost households an extra £63bn, around £2,200 each, according to the Energy and Climate Intelligence Unit and E3G, two climate and energy research organisations. Less than half of the country’s gas now comes from its own North Sea fields, and imports often come from places that turn out to be unstable or unreliable.
Two recent decisions on the Moray Firth near Inverness capture the government’s dilemma. At Whiteness Head, a yard where workers built North Sea oil platforms for nearly 30 years, the Chinese turbine maker Ming Yang wanted to invest £1.5bn and create up to 1,500 jobs. In March, after US lawmakers urged the UK to block the plan, ministers did so, citing national security. Last month, the same government approved a new North Sea gas field, Jackdaw. No to Chinese wind turbines; yes to North Sea gas.
The choice ahead is starker still. Within hours of Jackdaw’s approval, US President Donald Trump, who has opposed wind turbines since objecting to a wind farm near his Aberdeenshire golf course in 2006, posted on Truth Social: “They should go FULL BLAST!!! TAKE DOWN THE COSTLY AND RIDICULOUS WINDMILLS!” The government must now decide whether to approve Rosebank, west of Shetland, the UK’s largest undeveloped oil field. Rosebank is far bigger than Jackdaw; Energy Secretary Miatta Fahnbulleh has said it would produce about seven times the emissions, and it is mostly oil rather than gas. The subject has reportedly split the cabinet, and a decision is expected within weeks.
Opponents of the government already blame high bills on its reluctance to drill. Conservative leader Kemi Badenoch has told the prime minister to “stop faffing about” and grant permission, calling drilling “the only way we can protect families from rising bills”. Reform UK’s Richard Tice argues that using Britain’s own gas would bring bills down. But Fahnbulleh is clear that it would not. “No, it doesn’t,” she said. “In the end, the oil and gas is sold on global markets.” Tessa Khan of the campaign group Uplift goes further: Rosebank “doesn’t really do anything for energy security”, she argues, but does send “a very dangerous signal about the UK’s seriousness about addressing climate change after the summer that we’ve just had”, Britain’s hottest on record, with heatwaves, droughts and wildfires the Met Office’s chief scientist said would have been almost impossible without global warming.
Zoom out and the row looks different. North Sea output has fallen by more than two-thirds since its 1999 peak, and the Office for Budget Responsibility expects a further decline of around 10% a year even with Rosebank, which its forecast assumes goes ahead. Jackdaw’s reserves amount to a few months of UK gas demand; Rosebank holds less than a year’s worth of oil consumption. Last week the government introduced a bill to write its ban on new exploration licences into law, though Rosebank, already licensed, is not covered. That could let ministers approve the last big field while promising there will never be another.
By contrast, the alternative is to build. A wind turbine or solar panel costs money up front but generates power for decades without fuel shipments. The Climate Change Committee calculates that a future shock like 2022’s would push bills up 59% on a high-carbon path, but only 4% with a renewables focus. Costs of new solar power fell 90% between 2010 and 2024, and onshore wind by 70%, according to the International Renewable Energy Agency, though inflation and higher interest rates have pushed initial costs back up; last year Ørsted scrapped the Hornsea 4 wind farm off Yorkshire, blaming supply chain costs. Britain also needs expensive new networks, and gas stations still often set wholesale prices, so building renewables does not automatically lower bills.
Then there is China, which makes most of the world’s solar panels and batteries and around two-thirds of its electric cars. Asked whether Britain was swapping dependence on petrostates for dependence on Beijing, Fahnbulleh conceded: “Well, look, we are,” adding that the market is diversified and that she wants more kit made here. Yet UK-built turbines were exactly what Ming Yang offered. “There was a security risk, and national security comes first and foremost,” she said, though the government has never explained what it was. Two days before Jackdaw’s approval, Japan’s Sumitomo Electric opened Britain’s first HVDC subsea cable factory at Nigg, creating up to 250 jobs. Foreign investment, just not from China.
With America out of the Paris agreement and national pledges adding up to only a 6% cut in global emissions by 2035, a tenth of what scientists say is needed, China is filling the space. Li Shuo of the Asia Society Policy Institute calls it a “role reversal”. For UK households, the hard choices arrive just as budgets are stretched thin, and the outcome will be felt not in negotiating rooms but on the bills that arrive from January onward. Whether ministers choose to drill or to build, the question families will ask is simple: will the next winter be any easier to heat through than this one?