Electricity bills will rise.
Electrification can help lower bills through a combination of lower prices and increased energy efficiency.
Additional power generation will necessarily be a part of a deep electrification strategy and the addition of more plants and more power will tend to pull prices down. Indeed, the impact of new wind and solar plants in Germany means that wholesale power prices there now routinely hit zero during windy periods, and there is plenty of research showing that new renewable generation has pushed down power prices both in Europe and beyond. Even back in 2011-13, detailed analysis of the German system shows that market prices would have been 5.29 ct/kWh higher had it not been for the additional power supplied from wind and solar.
The costs of these fuel-free power sources have also been falling dramatically and are now cheaper than conventional fossil generation in many places. Solar PV costs have fallen between 66-80% between 2010 and 2018. With this track record and the promise of further low-carbon power cost reductions in future, we may well see the average price of power fall as part of a comprehensive strategy to decarbonise through electrification.
Finally, even in the event that prices do not fall, bills can be lowered through the improvements to energy efficiency resulting from electrification. This is particularly the case for electric vehicles and electric heat pumps, which are both substantially more energy efficient than their fossil fuel equivalents. Air source heat pumps, for example, can output more heat than the actual amount of electricity consumed and achieve efficiencies of around 300%, relative to efficiencies approaching 90% for a modern gas boiler, as heat is lost through the exhaust gases.
As a result of these factors, electrification can actually help to lower consumer bills.
Jorge Blazquez et al., “The Renewable Energy Policy Paradox,” Renewable and Sustainable Energy Reviews, 2018, https://doi.org/10.1016/j.rser.2017.09.002.
Marius Dillig, Manuel Jung, and Jürgen Karl, “The Impact of Renewables on Electricity Prices in Germany – An Estimation Based on Historic Spot Prices in the Years 2011–2013,” Renewable and Sustainable Energy Reviews 57 (May 1, 2016): 7–15, https://doi.org/10.1016/j.rser.2015.12.003.
IRENA, “Renewable Power Generation Costs in 2018,” 9, 45.
Currie & Brown, “The Costs and Benefits of Tighter Standards for New Buildings,” 27–28.