Terra Firma Energy – 22 July 2025

Ed Miliband, the UK’s Energy Secretary, has instructed the National Energy System Operator (Neso) to ensure Britain has 40 gigawatts (GW) of backup electricity generation in place by the end of the decade. This move is designed to guarantee power supply during periods when wind and solar output are low.

Miliband’s directive opens the door for a new generation of gas-fired power stations across the UK. The majority of this backup capacity—enough to match the output of 35–40 large gas plants—is expected to come from gas, with the remainder supplied by batteries, interconnectors, and other technologies.

This initiative is part of the UK’s capacity market, a system where companies are paid to keep power stations ready for use when needed. The cost of this backup system is already £1.3 billion per year and could rise to £4 billion by 2030, according to the Office for Budget Responsibility.

Industry analysts point out that the capacity market is fueling a construction boom for new, flexible gas plants—over 100 are now seeking grid connections. While these plants help keep the grid stable, they add to consumer bills and create what some experts call “two parallel electricity systems”—one renewable, the other fossil-fuelled.

Critics argue that this approach pushes up costs for households and businesses, while delivering generous long-term subsidies to gas generators. As John Constable of the Renewable Energy Foundation notes: “Under the capacity market, consumers are forced to subsidise a shadow fleet of gas turbines and batteries to guarantee security of supply. This results in two parallel electricity systems and reduces grid productivity.”

Miliband’s announcement highlights the challenge of balancing the UK’s climate ambitions with the practical need for reliable, affordable energy—especially as the share of renewables continues to rise.