UK risks missing out on £250bn of additional economic output without urgent action on energy costs, according to new PwC UK report
The UK could unlock up to £250 billion in additional economic output over the next decade if it closes its electricity price gap with international competitors, according to new analysis from PwC, supported by the CBI and Energy UK.
PwC's report, Powered Up or Priced Out? The £250bn Case for a National Energy Plan, warns that a new era of geopolitical instability and energy market disruption is exposing a critical vulnerability in the UK's growth model. As recent events in the Strait of Hormuz demonstrate, energy security is now a defining factor in economic competitiveness and growth. Against this backdrop, the report finds that persistently high industrial electricity prices, peaking at 63% above the G7 median in 2024, are undermining UK competitiveness, influencing investment decisions and constraining growth across the economy.
UK businesses currently spend nearly £60bn a year on energy and the report shows that bringing UK electricity prices closer to G7 levels could deliver up to £250bn of additional GVA over ten years, equivalent to around 8% of today’s GDP. Around half of investors surveyed on the impact of energy prices for this report cite electricity costs and infrastructure planning as key areas for improvement. Affordable, reliable electricity would strengthen investment in energy intensive industries such as digital infrastructure, advanced manufacturing and clean energy, while boosting productivity and exports.
National energy plan
To capture the £250bn opportunity, the report proposes the creation of a comprehensive national energy plan to align energy policy with economic growth. Current policy direction, while progressing, does not yet constitute a fully integrated framework capable of delivering at the required pace and scale.
A national energy plan would provide a single, coordinated strategy across energy supply, demand and infrastructure, helping to improve investor confidence, align delivery across institutions and ensure the energy system supports long-term economic growth. It would establish a clear framework for balancing the trade-offs between cost, security and speed, while addressing two critical priorities: improving price competitiveness and creating a more enabling regulatory environment. This includes reassessing how policy costs are allocated and improving transparency around energy bills to help narrow the UK's industrial electricity price gap, balancing long-term energy security objectives with the need to remain internationally competitive. It also requires a simpler, better coordinated regulatory environment to support investment and accelerate delivery. PwC estimates that improved regulatory coordination alone could unlock around £9bn of additional economic value over the next decade.
Together, these changes would create the conditions to unlock long-term investment, providing an opportunity to leverage the UK’s strength in financial services and attracting capital at the scale needed to deliver the transition.
At the same time, the report argues that businesses and investors must act with equal urgency. It calls on businesses to take greater ownership of their energy management, embedding technology and AI to improve operational efficiency and gain more choice and control over when and how energy is used across their value chains. PwC estimates that better efficiency and more flexible energy use could reduce the UK's nearly £60bn annual commercial and industrial energy spend by around 30%.
The report also highlights the critical role of investors in unlocking the long-term capital needed to transform the UK's energy system. It calls for greater collaboration between government, business and the investment community to create an environment that attracts capital at the scale required, while developing innovative financing solutions that can help deliver the infrastructure, technology and system capability needed to support future economic growth.
Vicky Parker, Energy, Utilities and Resources Industry Leader at PwC UK, said: “The rules of the game have changed. In a more volatile and contested world, energy security is no longer just an energy issue. It has become a defining factor in economic competitiveness, investment and national resilience.
“The UK's persistently high electricity costs are increasingly weighing on competitiveness and investment at a time when reliable, affordable and secure energy is becoming more important than ever. Our analysis shows that addressing these structural challenges could unlock up to £250bn of additional economic output over the next decade.
“To seize that opportunity, the UK needs a comprehensive national energy plan that brings together policy, infrastructure and market reform into a single, coherent strategy. But government cannot act alone. Businesses must also accelerate innovation, improve energy efficiency and build the resilience needed to compete and grow in an increasingly uncertain world.”
Louise Hellem, Chief Economist at CBI, said: “The evidence is clear: UK firms face some of the highest energy costs among our international competitors, holding back investment, competitiveness, and growth. That is not only a drag on business, but a missed opportunity for the wider economy, jobs and living standards.
“In an increasingly volatile world, recent geopolitical events are a reminder that access to reliable and affordable energy is fundamental not only to competitiveness, but also to national security. The UK now needs a national energy plan that makes bringing business energy costs back into line with international competitors an urgent priority.
“Getting this right would lower the cost of doing business, unlock investment, boost productivity and deliver benefits across the wider economy, including for households. It is an opportunity the UK cannot afford to miss.”
Dhara Vyas, Chief Executive at Energy UK, said: “High energy costs are holding British business back, stifling investment and weakening competitiveness. Widespread and strategic reforms are critical not only for growth, but for the UK’s long-term energy security.
“The Government must act now to tackle the core drivers of high energy costs for all businesses, rather than focusing on sticking-plaster support for only a few sectors, funded by other bill payers. This is the only way to bring down bills now, while ensuring energy is affordable and secure for the long term.”
PwC’s 2026 energy report, Powered Up or Priced Out? The £250bn Case for a National Energy Plan, can be found here: https://www.pwc.co.uk/industries/energy-utilities-and-resources/insights/energy-impact-analysis.html