Britain’s energy secretary Ed Miliband will unveil a tax hike on wind and solar farms aimed at steering them toward fixed‑price contracts. The shift follows the Iran‑driven surge in gas prices that lifted wholesale electricity rates under the country’s pay‑as‑clear market design. By decoupling power prices from volatile gas costs, the government hopes to blunt future shocks in the short term.

Under the legacy renewables‑obligation scheme, generators will be encouraged to sign contracts for difference, where the state guarantees a fixed electricity price and recoups any excess through a levy on consumer bills. A 45% levy applies to wholesale sales above £75 per megawatt hour, nudging non‑CfD plants to join the scheme and shielding households from price spikes.

Labour’s 2024 election promise to cut bills by £300 by 2030 adds political pressure to deliver tangible relief. While ministers dismissed a wholesale market split, they will also roll out reforms dubbed Reformed National Pricing to optimise plant locations amid grid constraints. The combined tax and CfD push creates a clearer revenue stream for renewables and a more predictable cost base for consumers.