UK energy shake up: carbon tax scrapped but renewables and grid upgrades are the real story

The UK Treasury scrapped the Carbon Price Support in April and floated plans to decouple gas from electricity prices. But the real energy shift is not coming from these headline policy changes. It is coming from renewables, grid upgrades, and diversified gas supply that are already reducing gas's role in setting power prices. Gas set the power price about 90% of the time in the early 2020s. That figure is now closer to 60% and could fall to 15% as new low-carbon capacity connects. The article from Gravis Capital Management argues that removing the carbon tax will barely affect bills because the UK Emissions Trading Scheme absorbs most of the cost. The proposed decoupling measures are vague and untested, with key details on strike prices and nuclear treatment still missing. Meanwhile, the system is decarbonizing through investment: the AR7 auction locked in a record 14.6GW of new low-carbon capacity, gas demand has fallen 20% in three years, and Britain now sources 47% of its gas from Norway. The real energy shake-up is happening quietly through renewables and grid upgrades, not through policy headlines.