UK plans shakeup to energy pricing to weaken link between electricity and gas prices

The article notes that Northern Ireland is part of a separate energy market.

Shadow energy secretary Claire Coutinho argued the plan would pile on costs for electricity bills. Liberal Democrat Pippa Heylings urged action to decouple electricity prices from gas, Green Party's Carla Denyer welcomed the plan but said action was overdue, Plaid Cymru's Llinos Medi called for further steps, and Reform UK's Richard Tice criticised subsidies for clean energy.

Energy secretary Ed Miliband announced planning-law amendments to make it easier for people without driveways to charge electric cars and to enable more businesses to install solar panels, as part of a broader push toward clean electricity technologies.

Older clean energy projects, which account for about a third of Britain's electricity, would be moved onto fixed-price contracts to align with newer renewables and reduce the impact of spikes in gas prices on bills.

The windfall tax on some electricity generators will rise to 55% from 45%, with the extra revenue intended to support households with the cost of living and to incentivise the voluntary switch to fixed-price contracts that are less exposed to gas price volatility.

Britain's government announced a planned shakeup to electricity pricing designed to weaken the link between wholesale electricity costs and gas prices within about a year. Officials said they will not overhaul the entire system for now, noting gas-fired generation remains part of the mix when sun and wind are unavailable, while moving older clean energy projects onto fixed-price contracts to reduce exposure to gas price spikes.

The windfall tax was introduced in 2023 and applies to generators with older renewable energy contracts, designed to tax windfall profits when gas prices spike.