-- The UK government on Tuesday unveiled a series of measures aimed at reducing the influence of volatile global gas prices on domestic electricity costs, as geopolitical tensions continue to disrupt energy markets.
The plan centers on expanding long-term fixed-price contracts for renewable and low-carbon power generators, alongside an increase in the Electricity Generator Levy to 55% from 45%, targeting excess profits earned during gas-driven price spikes.
Officials said the move is designed to shield households and businesses from external shocks, such as the current ongoing military conflict in Iran, leading to significant volatility in global gas markets.
The government said gas now sets electricity prices around 60% of the time, down from roughly 90% in the early 2020s, with that share expected to fall to about 50% by 2030.
A key component of the strategy includes voluntary wholesale Contracts for Difference, which the government said will be introduced later this year, with an allocation process set to run in 2027.
The policy package also includes broader efforts to accelerate renewable deployment, including faster planning approvals, expanded use of public land for solar and wind projects, and investment in grid infrastructure.
Britain's Prime Minister Keir Starmer emphasized the "need to get off the fossil fuel rollercoaster" in order to make energy bills stable and shield families across the UK from global volatilities. "When global gas prices spike, people here shouldn't be picking up the tab," he said.