What is the spark gap and why does it matter?
The spark gap is the difference between what a unit of electricity costs and what a unit of gas costs. Energy UK, the trade body for energy suppliers and generators, says that in the year to July 2026 electricity cost around four times as much as gas per unit.
That’s the quiet reason heating a home with electricity looks expensive on paper, even though a heat pump uses far less energy than a gas boiler for the same warmth. Your bill counts units, and the units are priced very differently. Not the catchiest name for a bill problem, but a useful one to know.
One caveat on the four to one figure. Energy UK says that around July 2026, higher wholesale gas prices caused by international conflict began distorting the spark gap, so its figure covers the year before that point. Energy UK does not say how far the gap has moved since, so the ratio today may look different.
On 20 October, Energy UK published a report called Sparking Change, supported by Mitsubishi Electric, arguing that the Government should narrow the spark gap. It’s a trade body’s proposal to Government, so treat every figure in it as Energy UK’s estimate, not a promise about your bill.
What does Energy UK want the Government to do about the spark gap?
Energy UK wants the Government to bring electricity prices down relative to gas. Its long term aim is a spark gap of 2.5 to 1 for households, with an interim target of 3 to 1 by 2030.
The report sets out three ways to get there:
- Take the remaining policy costs off electricity bills, either by moving them into general taxation at a cost of around £2.5 billion a year, or through a new way of spreading the cost of levies over a much longer period.
- Move the gas standing charge onto the unit rate from April 2028, with price protections for low income households that use a lot of gas.
- Make low cost green finance and tailored advice easier to get, so more people can afford to switch to clean heat.
Energy UK points to a recent example of the first idea. It estimates that the temporary 75% Renewables Obligation discount announced in the 2025 Autumn Budget narrowed the spark gap from 4.4 to 1 to 4 to 1.
Dhara Vyas, Energy UK’s Chief Executive, said: “The single most effective step the Government can take to improve affordability, make better use of our energy system and accelerate the uptake of cleaner technologies is to reduce the price of electricity relative to gas.”
How much could a smaller spark gap save?
Energy UK estimates that a spark gap of 3 to 1 by 2030 could save a medium dual fuel customer around £40 on their annual energy bill. It says that figure could rise to around £300 for a household that also installed a heat pump.
Those are Energy UK’s estimates for 2030. They depend on the policy changes actually happening, and your own saving would depend on how much gas and electricity you use. They are not a forecast of what you will pay this winter.
Businesses are in the same boat. Energy UK says firms face some of the highest industrial electricity prices in the G7, and puts the business spark gap today at between 4.2 to 1 and 4.5 to 1, depending on the type and size of business. On current policy it expects that to fall only to between 3.9 to 1 and 4.3 to 1 by 2029/30, which it says will not be enough to move businesses away from gas heating.
The report also says a smaller spark gap could support at least 250,000 more homes installing a heat pump by 2030. If you are weighing one up now, our heat pump cost guide covers what to check before you commit.
What does the spark gap mean for my energy bill right now?
Right now? Nothing changes. The report is a set of recommendations, so the unit rates on your current tariff are whatever your supplier set when you signed up.
The standing charge idea is the one most likely to touch households on gas. Moving it onto the unit rate would change who pays what, depending on how much gas a home uses, which is why Energy UK says it would need protections for low income households with high gas use. We have more on the wider debate in our standing charge reform explainer.
The sensible move is the dull one. Doing nothing leaves you on whatever rate your supplier sets next, so a quick look at what a fixed deal would cost you today is worth five minutes. If you are tempted by a time of use tariff, our time of use tariff guide explains when that kind of deal can make sense.
Key takeaways
- The spark gap is the ratio of electricity prices to gas prices per unit.
- Energy UK says electricity cost around four times as much as gas in the year to July 2026, and that higher gas prices have distorted the ratio since.
- Its report proposes a spark gap of 3 to 1 by 2030, and says that could save a typical dual fuel home around £40 a year.
- These are recommendations and estimates. Nothing in the report changes your current tariff.
Frequently asked questions about the spark gap
- What does the spark gap mean in plain terms?
- It is the price of a unit of electricity compared with a unit of gas. A spark gap of 4 to 1 means electricity costs four times as much per unit.
- Is the spark gap why electric heating looks so expensive?
- Energy UK says policy costs on electricity bills weaken the financial case for switching to clean heat, even though heat pumps are far more efficient than gas boilers.
- Will the spark gap change my bill this winter?
- No. The report covers changes up to 2030 and is a set of recommendations, so it does not alter the unit rates on your current tariff.
- Does the spark gap affect businesses too?
- Yes. Energy UK puts the spark gap for businesses between 4.2 to 1 and 4.5 to 1 today, depending on the type and size of business, and expects it to be between 3.9 to 1 and 4.3 to 1 by 2029/30 without further action.
- Who paid for the report?
- Mitsubishi Electric supported it. Mitsubishi Electric sells heat pumps and Energy UK represents energy companies, so read it as an industry view.
Sources
- Energy UK press release, 20 October 2026: the four to one figure and the July 2026 distortion caveat, the 2.5 to 1 and 3 to 1 targets, the three pathways, the £2.5 billion and April 2028 figures, the Renewables Obligation estimate, the £40 and £300 savings, the 250,000 heat pumps, the business ratios and the Dhara Vyas quote.
- Sparking Change report page, Energy UK: the report the press release describes. We have not quoted from the full report beyond what the press release states.
Checked 21 October 2026.
