# The real cost of transition

_In last week’s blog, I wrote about the real drivers of high electricity prices in the UK. Contrary to the official line, it isn’t all about imported gas. The real story lies in the cost of the energy transition — and the vast subsidies and market distortions that come with it._

Neil Woodford · 19 June 2025 · 1 min read

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In my [Big Beautiful (Electricity) Bill](https://www.noisecancelling.co/read/big-beautiful-electricity-bill) blog published last week, I wrote about the real causes of high electricity prices in the UK. Significantly, the consensus narrative on this subject, namely that they are solely caused by the high cost of imported gas, is just not true. The huge costs and incentives embedded in the push to decarbonise the UK’s energy system are the real culprit and the failure of the government to come clean on this issue will ultimately have all sorts of disruptive implications for this radical policy choice in time.

Getting to the truth on this subject proved to be much more difficult than I had thought, and I was genuinely surprised by the extent to which the consensus, but inaccurate, narrative had been lazily adopted by those who should know not to just accept what government ministers tell them.

I will continue to trawl for interesting data and insights which shine a light on what really drives electricity prices, and the policy choices governments make on our behalf and whilst looking for some interesting charts on another subject, I came across this one which I think helps to inform the points I made in that rather lengthy blog.

This chart shows what has happened in the US in terms of Federal subsidies, paid by the central government, to different forms of electricity generation from 2010 through to 2023. A lot of fossil fuelled generation infrastructure in the US was built before 2010 and so to some extent this is an unfair comparison, but it does serve to highlight the extent to which, even in the US, significant subsidies are required to incentivise investment in renewable generation.

![The real cost of transition](https://cdn.sanity.io/images/v3acfbvo/production/0cb80500ae33cc28763f7ba9f3e65f95602d77dc-1754x1135.png?w=1600&fit=max&auto=format)