Targeting net zero by 2050 is cheapest option for UK says energy system operator
Fri 12 December 2025
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A new report by the National Energy System Operator (NESO) says that energy costs are set to halve over the next 25 years as a result of the shift to renewable energy and the reduction in bills for imported oil and gas. Based on NESO modelling, a scenario with meets the UK's target of net zero by 2050 will deliver the lowest cost energy for the country.
NESO, which manages the UK's energy infrastructure says that - according to it's 'holistic transition' scenario - the UK will save £36bn a year over the next 25 years (equivalent to 1% of GDP) compared to an alternative scenario that slows climate action.
The savings arise are from lower fuel costs and reduced climate damages, relative to a scenario ('falling behind') where the UK fails to meet its climate goals.
NESO says that the UK will need to make significant investments to reach net zero and that less ambitious options could be cheaper in the short and medium-term (until 2045) after which time overall cost benefits are apparent.
NESO says that slowing down efforts to meet net zero would reduce the amount of investment needed, but overall costs would be higher unless the damages from worsening climate change are ignored. Total system costs, which are currently about 10 per cent of national income, fall to roughly 5-6 per cent by 2050 despite growing energy demand.
The scenarios are based on a structural shift towards electrification: greater investment in renewable generation, grid infrastructure and electric vehicles steadily reduces the UK’s reliance on imported fossil fuels. (According to the FT, last year the country spent £50bn on oil and gas - mostly for transport, heating and industry.)
A spokesperson for the Department for Energy Security and Net Zero (DESNZ), reported by the FT said: “The findings make clear the risks if Britain does not act and sticks with the status quo.
“We risk falling behind in reaping the rewards of clean energy and therefore would be stuck relying on volatile global gas markets which leave families vulnerable to higher bills in the long run.”
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