UK proposals for fixed-price contracts for older renewables backed by RenewableUK

Industry group RenewableUK on Thursday expressed support for proposals for new fixed-price contracts for older wind and other renewable projects as a means to reduce electricity bills for consumers.

The proposals concern projects supported by the Renewables Obligation, which closed to new renewables in 2017. These older projects would be able to opt for new long-term, fixed-price contracts, which will in fact replace the market power price which is set by volatile gas prices. The contemplated new contracts would be similar to the Contracts for Difference (CfD) scheme.

The approach has been originally proposed by the UK Energy Research Centre and also has the backing of Energy UK, RenewableUK said. According to the announcement, the industry wants to work with the government on designing and implementing a scheme in the new year.

“We’ve been discussing these proposals with our member companies in detail to ensure that the changes are designed in the right way and are fully deliverable, so that we can maximise savings for bill payers,” said RenewableUK's chief executive Dan McGrail.

“We’re keen to work collaboratively with the government and a wide range of other organisations to explore how we can put a new scheme in place in an expedient way. The proposals put forward so far have widespread support among our members and further discussions are taking place,” he added.

According to Energy UK, the proposals, which also involve nuclear plants, could cut energy bills for households and non-domestic customers by between GBP 10.8 billion (USD 12.5bn/EUR 12.5bn) and GBP 18 billion per year from next year.

“By giving generators the chance to secure a longer term agreement with lower returns in place of selling electricity at wholesale market prices, this scheme would be a significant first step to decoupling gas from retail electricity prices,” said Adam Berman, Energy UK’s deputy director.

(GBP 1 = USD 1.157/EUR 1.156)

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