By Roger Kemp, The Conversation

Our children will enjoy in their homes electrical energy too cheap to meter.– Lewis L Strauss, chair of the US Atomic Energy Commission, 1954.

When Strauss first coined the phrase above he was thinking of hydrogen fusion, a technology that always seems to be a tantalising 30 years away. However even without futuristic new technology the British electricity system may actually approach this mythical situation of energy that is “too cheap to meter”.

In the future, the industry's costs will be determined by the number and size of power plants and turbines that will be needed, rather than the fuel burned in them. This won't mean an end to electricity bills – but it will mean some major changes in how they are calculated.

When the UK's electricity industry was privatised in the 1990s its power plants had the capacity to generate more than was needed. This was despite the fact many of these plants had already been in service for decades. The national transmission network was also well established. This meant the cost of electricity was largely determined by fuel prices — mainly coal and gas.

The hardware used by the industry today has changed little since privatisation — in fact much of it has been in service since the 1960s. On a typical day in November 2014, 37% of the UK's electricity was produced by 40-year old coal-fired power stations, 31% came from gas power stations, many built during Margaret Thatcher's “dash for gas”, and 14% from nuclear power stations, all but one of which are scheduled to close in the next ten years. The rest came from renewables and imports from the continent.

Over the coming 15 years this will change. To meet national and European targets for CO2 and industrial pollution, existing coal plants will be phased out and gas will be reserved for periods of peak demand. Most electricity will be provided by nuclear and renewables, supplemented during the winter by coal and gas.