What's Driving Energy Prices Higher And How To Bring Them Down? - Possible Impacts for Caithness, Sutherland and Rural Highlands

22nd November 2025

Paul Kelso investigates what's driving energy prices higher and how to bring them down now and in the future.

It comes as analysts expect the cap to fall by 1% for a typical dual fuel household.

This would leave energy bills 35% higher than pre-Ukraine invasion levels.

UK parties are sharply divided on Net Zero. Labour and the Greens want to accelerate it well before 2050, the Liberal Democrats back the 2050 target but dropped their earlier 2045 pledge, while the Conservatives under Kemi Badenoch and Reform UK now oppose Net Zero entirely, calling it unaffordable and unrealistic.

Conservatives
Past stance: Introduced the 2050 Net Zero target under Theresa May in 2019.

Current stance (2025, Kemi Badenoch): Abandoned the 2050 target, calling it "impossible" without harming living standards.

Plans to repeal the 2008 Climate Change Act if elected, arguing Net Zero damages the economy.

Focus now on continued oil and gas drilling and a "pragmatic" approach.

Labour
Strongly supportive of Net Zero.

Pledges to make Britain a "clean energy superpower" by 2030, decarbonising electricity entirely within the decade.

Policies include:

Creation of GB Energy, a publicly owned energy company.

Investment in renewables, nuclear, and home insulation.

A National Wealth Fund to support green jobs and industry.

Labour frames Net Zero as a way to cut bills, create jobs, and ensure energy security.

Liberal Democrats
Originally pledged Net Zero by 2045, but in 2025 dropped this and aligned with the 2050 target instead.

Support Labour's 2030 clean power goal and back technologies like small modular nuclear reactors.

Emphasise fairness: ensuring communities and workers aren't left behind in the transition.

Green Party
Argue the UK's 2050 target is too slow.

Push for Net Zero more than a decade earlier than 2050.

Ambitions include:

70% of electricity from wind by 2030.

80 GW offshore wind, 53 GW onshore wind, and 100 GW solar by 2035.

£40 billion investment to drive out fossil fuels.

Strong emphasis on community-owned energy and rapid fossil fuel phase-out.

Reform UK
Firmly opposed to Net Zero.

Plans to scrap the target entirely and end renewable subsidies.

Argue Net Zero is too costly, citing figures from £45bn to £225bn in supposed savings.

Position Net Zero as a "climate backlash" issue to attract disaffected Conservative voters.

Key Divide
Pro-accelerated Net Zero: Labour, Greens.

Moderate Net Zero (2050): Liberal Democrats.

Anti-Net Zero: Conservatives (under Badenoch), Reform UK.

This split makes climate policy one of the sharpest dividing lines in UK politics today, with Labour and Greens seeing it as an economic opportunity, while Conservatives and Reform frame it as a financial burden.

Possible practical consequences for communities like Caithness and the Highlands

Conservatives (Badenoch era: anti-Net Zero)
Policy: Scrap the 2050 target, repeal the Climate Change Act, expand oil & gas drilling.

Rural impact:

Short-term: jobs in oil/gas supply chains may continue, but these are concentrated in Aberdeen and offshore, not Highlands.

Long-term: rural households remain exposed to volatile fossil fuel prices.

Missed opportunity for insulation and renewable investment in remote homes, which already face higher heating costs.

Risk: Rural Scotland could be left behind in energy transition, with higher bills and fewer green jobs.

Labour (pro-accelerated Net Zero)
Policy: Clean electricity by 2030, GB Energy (publicly owned), mass insulation, green jobs.

Rural impact:

Potential for community-owned wind and tidal projects in Caithness and Orkney.

Insulation drive could cut heating bills in older stone houses.

GB Energy could reinvest profits locally, supporting rural resilience.

Opportunity: Labour's framing of Net Zero as a jobs-and-bills policy aligns with rural needs — but delivery depends on whether investment reaches small communities, not just cities.

Liberal Democrats (moderate Net Zero, 2050)
Policy: Support 2050 target, clean power by 2030, small modular nuclear reactors.

Rural impact:

Nuclear focus may benefit central belt more than Highlands.

Still supportive of renewables, but less ambitious than Labour/Greens.

Could mean slower rollout of insulation and community energy schemes.

Risk: Rural areas may see incremental progress, but not transformative investment.

Greens (accelerated Net Zero, community-first)
Policy: Net Zero well before 2050, massive wind/solar expansion, £40bn investment, community energy.

Rural impact:

Strongest alignment with Highland potential: offshore wind in Moray Firth, tidal in Pentland Firth, community-owned schemes.

Push for local ownership could keep profits in Caithness rather than flowing to multinationals.

Heavy emphasis on insulation and sustainable transport could reduce rural fuel poverty.

Opportunity: Greens’ vision most directly empowers rural communities, but scale of ambition may clash with delivery capacity.

Reform UK (scrap Net Zero)
Policy: End Net Zero, scrap subsidies, focus on cheap fossil fuels.

Rural impact:

Short-term: no insulation or renewable support, reliance on oil heating continues.

Long-term: rural households remain vulnerable to global energy shocks.

No investment in local green jobs or infrastructure.

Risk: Rural Scotland locked into high-cost, outdated energy systems.