Breaking the link between gas and electricity prices
The UK Government is moving to introduce long-term fixed price contracts for renewables.
Both business and domestic customers should benefit from plans to end the influence of international gas on electricity prices.
Instability in the Middle East has shown that Britain’s reliance on international fossil fuel markets leaves the country exposed to volatile gas prices.
While the issue is lessening as more renewable options come online, a significant share of renewable generation, about 30% of Britain’s power supply, is still exposed to wholesale prices set by gas.
Plans to break the link include:
- Voluntary long-term fixed contracts: offered to existing low-carbon generators not on fixed‑price contracts
- An updated Electricity Generators Levy: immediate action to tax excess profits through the Electricity Generator Levy by raising the rate from 45% to 55%,
Meanwhile DESNZ and Ofgem have issued an open letter on connections reform delivery.
Under the new process, 221GW of projects that applied for firm connection agreements, but were not needed for 2035, or were no longer progressing, have been moved out of the main queue.
