November - Hope for energy affordability in the UK

As the curtain closes on November, I have my candidate for the most important piece of economic and business news from the UK for you (if you missed previous months, see comment for links)

It’s about energy in the UK. First, let’s do some reality checks

ONS data found that energy bills became a much larger share of household spending for many: poorer households, in particular, saw a bigger proportion of their income go to fuel costs.
A recent study by PwC (2025) found that 89% of UK businesses surveyed said volatility in energy prices reduced their profits in the past 12 months.
ONS latest data (2025) shows that electricity prices for business users increased sharply: from ~14.8p per kWh in early 2021 to a peak of ~28.4p per kWh in late 2023. A rise of more than 90%. Although prices have receded slightly by late 2024, business electricity costs remain roughly 75% above early-2021 levels, pre-Ukraine war.

What this data shows is that energy is expensive for all, households and businesses. My understanding also reveals that the problem is not on the supply side, i.e., the high cost of energy in the UK is not driven by demand outstripping supply. It is simply driven by the fact that the UK energy framework favours expensive energy supply, directly or indirectly. And this narrative is only based on current demand. Globally, energy demand is projected to rise by about 40% in a decade.

Which brings me to the news of the month for the UK. Earlier in the year, the PM, Keir Starmer, gave a John Fingleton-led task force a mandate to “set out a path to getting affordable, fast nuclear power for Britain.” The committee has now completed their work and produced 47 sweeping recommendations that could help make building nuclear power affordable again. Why is this important?

One, nuclear energy provides long-term (40-60 years) stability of supply at a predictable cost. With demand also projected to continue to increase, nuclear energy could provide a cheaper source of energy to meet this demand, reduce households’ COL and make UK businesses competitive. And of course, there is AI in the mix here. Energy is agreed as the bottleneck for AI acceleration, which made even the US put focus on Nuclear Energy again, OKLO is a good example here that has generated low revenue but has accelerated in market cap in anticipation of its potential.

On this news, most media outlets have reported on it & the PM is expected to make some announcements about it today. So, a ray of hope.

I’d like to add a common theme here about the UK—being default risk-averse. The FT reported that “It is several orders of magnitude cheaper to [build an equivalent nuclear power plant] in Korea and the UAE.” The task force named the reason for this as “the UK’s excessive focus on eliminating risk.” In my London Business School classes, one thing that’s been consistently emphasised is the sensitivity of ROI to the cost of capital. And the above directly increases cost, reducing NPV.

Update – January 6th, 2026

The issue of energy costs is a very serious one. Since energy is the lifeblood of industrialisation, and we cannot have an energy-poor country alongside an industrialising economy, failing to be painstaking in increasing energy consumption and reducing energy prices is an anti-growth strategy. The UK has a long way to go on this.

The Telegraph reported:

“Britain looks set to become not just the first country to industrialise, but the first to completely de-industrialise.” It continued:

It is perfectly clear what has gone wrong. Our obsession with Net Zero targets has left us with industrial energy prices that are twice those in France, and four times the US. The government has piled on extra taxes, from extra National Insurance for employers, to carbon levies, to landfill taxes that hit manufacturers harder than anyone. And planning rules make it impossible to build plants where they are needed.