Powering competitiveness: Why electrification is the UK’s next economic opportunity
Andrew Prag, Managing Director of Policy at We Mean Business Coalition and Beverley Cornaby, Director, Policy & Systems Change Collaborations Team and Director, UK Corporate Leaders Group
Electrification is emerging as one of the UK’s biggest economic opportunities, but the pace of delivery is failing to match business ambition. New evidence from Powering Up: Business perspectives on electrification, a global business poll commissioned by We Mean Business Coalition, E3G and the Global Renewables Alliance, and the Powering Prosperity report from Corporate Leaders Group UK, shows that accelerating electrification is essential to strengthening competitiveness, energy security and long-term growth.
In 2024, the UK became the first major economy to halve its greenhouse gas emissions while continuing to grow its economy. That same year, coal accounted for just 0.9% of electricity generation, while renewables supplied 47%, the largest share of the UK’s power mix. The UK’s net zero economy generated around £105 billion in 2025 and supported 1.1 million full-time equivalent jobs. Despite this progress, the political and policy landscape in the UK is becoming more contested, with increasing emphasis on cost-effectiveness and energy security, and growing political polarisation around the pace and importance of the low carbon transition.
Beyond this political noise, recent volatility in global energy markets has reinforced how exposed the UK remains to fossil fuel price shocks. While short-term measures can help shield households and businesses from rising costs, they do little to address the underlying vulnerability created by continued dependence on imported fossil fuels.
Generating cleaner electricity is only half the story. The next challenge is electrifying transport, buildings and industry. This means replacing fossil fuel-powered vehicles, boilers and industrial processes with electric alternatives powered by clean electricity.
The UK’s progress on decarbonization has positioned it well for the next phase of the global energy transition. The International Energy Agency has announced “the Age of Electricity“, noting that global electricity demand is growing faster than economic growth for the first time in three decades as transport, buildings, industry and digital technologies become increasingly electrified. This signals a fundamental shift in how economies operate: future growth will increasingly depend on access to homegrown, affordable electricity rather than fossil fuels. Consequently, electrification is emerging as one of the UK’s biggest economic opportunities. The transition is not simply about reducing emissions; it is about replacing dependence on volatile global fossil fuel markets with domestically generated electricity that offers greater price stability, resilience and long-term economic security.
While progress has been made in decarbonizing electricity generation, electricity still only accounts for less than a quarter of the UK’s final energy consumption. Transport, heating and industry still heavily depend on fossil fuels, and recent increases in energy prices have highlighted the economic risks to businesses of continued fossil fuel dependence.
A strategic business decision
Surveying nearly 2,000 business leaders worldwide, the Powering Up: Business perspectives on electrification poll shows a striking consensus: companies increasingly see electrification not only as a climate solution, but as a strategic business decision.
In the UK, the desire for more stable energy prices aligns closely to current political concerns around high energy costs, which are a significant concern for businesses. UK business leaders say faster electrification could help to avoid this, with 82% drawing a direct link between electrifying their operations and lowering their long-term energy costs.
Electrification offers other co-benefits too; 93% say electrifying their operations would improve their energy security. A further 88% believe it will make their business more competitive, and 79% expect it to enable them to create new jobs. Perhaps most tellingly, 79% say recent geopolitical instability has made electrification more urgent.
The economic opportunity
Where the polling captures business confidence, CLG UK’s Powering Prosperity report demonstrates why that confidence is well founded, arguing that electrification should not only be a pathway to reducing emissions but ‘a strategic economic choice’ that can strengthen resilience, competitiveness and long-term growth.
Figure 1. Cambridge Econometrics modelling shows that an electrification-led pathway delivers the strongest long-term economic outcomes for the UK under both baseline and high fossil fuel price scenarios. By 2050, GDP is projected to be more than one percentage point higher than under current policies, while a fossil fuel-led pathway results in weaker economic performance. Source: University of Cambridge Institute for Sustainability Leadership. (2026). Powering prosperity: How electrification can strengthen the UK’s economy, resilience and energy security (Figure 9).
Using macroeconomic modelling by Cambridge Econometrics, Powering Prosperity finds that an electrification-led pathway delivers stronger growth, productivity, employment and energy security than a mixed technologies pathway or a fossil fuel-led alternative. By 2050, UK GDP would be more than one percentage point higher while supporting around 250,000 additional jobs. The report also projects a 50–60% reduction in fossil fuel imports under this pathway. Such a reduction would strengthen resilience against global price shocks, reinforcing its conclusion that electrification is ‘not only essential for meeting climate targets—it is a strategic economic choice.’
Where are the bottlenecks?
Powering Prosperity argues that the challenge is no longer proving the value of electrification but overcoming structural barriers, including electricity pricing, grid constraints, access to finance, skills shortages and policy uncertainty. These barriers prevent businesses and households from capturing the full economic and resilience benefits of electrification.
The Powering Up polling shows how businesses are experiencing these challenges first-hand. 90% of business leaders polled expect to have largely electrified their operations by 2035, with nearly three quarters expecting to do so by 2030, indicating that many companies are already making investment decisions for an increasingly electrified economy. However, nearly half of UK executives say the country’s power systems are not keeping pace with the electrification needs of industry, while 51% believe government policies are moving too slowly. Six in ten say they would consider relocating operations overseas if they did not receive sufficient support to electrify. Policy bottlenecks are holding back progress.
The UK has already begun addressing some of these challenges. Through its Clean Power 2030 Action Plan, the Government has committed to reducing the queue for grid connections and reforming planning processes to accelerate the expansion of clean electricity infrastructure. It has also announced measures to decouple electricity prices from gas prices. However, both the polling and Powering Prosperity suggest matching business demand will depend on faster progress on infrastructure, planning and electricity market reform.
The role of policy
The next phase of the UK’s energy transition will depend on partnership. Businesses are ready to electrify, but they need policy support to go further, faster.
Business and government must work together to deliver the infrastructure, policy certainty and investment frameworks needed to accelerate the transition. Powering Prosperity outlines 6 priority actions for the UK government:
- Reform energy pricing to reduce system costs and enable consumers to benefit from low-cost renewable electricity.
- Reduce upfront costs through targeted financial support, innovative financing models and risk‑sharing mechanisms.
- Accelerate infrastructure investment through improved planning, stronger demand signals and enhanced system co-ordination
- Expand access to finance and reduce risk through public guarantees, standardisation and clearer investment frameworks
- Build workforce capability and improve information to support confident adoption of electrified technologies across households and businesses
- Support industrial transition through targeted policy measures that address competitiveness, supply chain constraints and system integration challenges.
These priorities are aligned with We Mean Business Coalition’s 10 Policy Principles to Seize the Electric Advantage, which set out high-level principles for how governments can create the conditions for businesses to electrify faster. This sentiment was also echoed by more than 100 businesses, representing $1.5 trillion in annual revenue, which earlier this month urged governments to make clean electrification a central pillar of economic and industrial strategy. Together, they argue that faster electrification can strengthen competitiveness, improve energy security, and reduce exposure to volatile fossil fuel markets.
Both Powering Up and Powering Prosperity show that businesses are already driving the transition. Across sectors, companies are investing in EVs, industrial electrification and cleaner heating because they recognize the commercial value of moving away from fossil fuels. This is reflected in the growing number of companies sharing their stories through We Mean Business Coalition’s Electric Advantage program.
Conclusion
The transition to a more electrified economy is already underway. The evidence shows that faster electrification can deliver stronger economic growth, greater competitiveness, and improved energy security. Businesses are moving to seize the electric advantage because they recognize the commercial benefits. By creating the right enabling conditions, the UK can capitalize on turning business ambition into the economic opportunity of the century.