The UK government has unveiled plans to introduce voluntary long-term fixed-price agreements for electricity producers that are not currently covered by the Contracts for Difference (CfD) scheme, as part of its efforts to address rising electricity costs (Government press release, 21/04/2026).
Under the Wholesale Contract for Difference (WCfD) framework, existing eligible renewable energy producers will be given the option to secure a fixed price for their power output, in return for relinquishing revenues from the forward wholesale market. The initiative is expected to be rolled out later this year, with an allocation process scheduled for 2027.
According to the government, approximately 30% of the UK’s renewable energy capacity could qualify for the WCfD. Facilities currently supported under the Renewables Obligation scheme would have the possibility to swap their wholesale market revenues for a fixed-price CfD. The Department for Energy Security and Net Zero (DESNZ) stated that these measures will reduce the share of electricity exposed to gas price shocks and provide generators the economic incentive to move on to fixed contracts not linked to volatile gas.
“Britain has already moved from gas setting the price of electricity around 90% of the time in the early 2020s, to around 60% today. Through the government’s clean energy mission, it is estimated gas will set the wholesale price around half of the time by 2030”, according to the government press release.
In parallel, the government intends to raise the Electricity Generators Levy (EGL), a windfall tax applied to excess profits of electricity generators in Great Britain, from 45% to 55% during periods of gas price surges. The additional revenues collected are expected to support households in times of energy crisis. Since late 2022, power producers have been subject to a 45% tax rate on electricity sold above GBP75/MWh (EUR86/MWh) under the EGL, introduced in response to the war in Ukraine, which triggered significant gas price increases across Europe (The Guardian, 21/04/2026).
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