Renewables subsidy change proposed to cut bills

Renegotiating the subsidies for older renewable schemes could help deliver significant savings for billpayers, according to a new report.

The UK Energy Research Centre has set out a series of reforms to reduce bills including a ‘Pot Zero’ measure to allows low carbon generators in receipt of the Renewables Obligation to voluntarily pivot onto Contracts for Difference.

It said although the government had announced a wholesale price Contract for Difference which removes exposure to wholesale gas prices, it pointed out a more ambitious approach could deliver greater bill reductions.

The paper highlights several other areas of focus, including further reforms to constraint and curtailment.

Rob Gross, Director of the UK Energy Research Centre and Professor of Energy Policy and Technology, said: “There is a clear opportunity to reduce electricity bills more quickly. As our electricity system becomes increasingly powered by renewables, the influence of gas on prices is already beginning to decline, but policy can speed up that process.”