The Hidden Cost of Net Zero: Cheaper Generation, Costlier Electricity

In Great Britain, newly contracted clean electricity is cheaper to generate than new fossil‐fuel generation subject to a carbon price. Nevertheless, electricity has not become cheaper for consumers. This paper traces ten system and policy layers of the consumer electricity bill to the specific tariff or levy through which each is recovered. The layers are generation, CfD settlement, transmission, distribution, balancing, storage, capacity, legacy policy, industrial policy and decommissioning. Three results follow. First, the full consumer cost of the wind‐dominated system is more than twice the headline Contracts for Difference strike price that dominates public debate. Second, the increase is not a generation story. System operator tariff forecasts published in 2025 imply a near‐doubling of the transmission revenue pool by 2030/31. However, no official publication assembles these layers into a single forward consumer cost. Third, against a deliberately conservative counterfactual without net‐zero legislation, the transition imposes a net consumer premium of £17–37/MWh in 2030 (roughly £6–12 billion per year). Almost all these premiums sit in the network and system layers rather than in the generation layer. These layers are largely recovered from demand, much of it at volume. How the premium is allocated, rather than its size, is therefore the main remaining lever for an affordable and socially sustainable transition.