Renewable energy generators and nuclear power plants could have their revenues capped under a new Government plan to ensure they are not benefitting from record-high energy prices. Without releasing much detail, the Government said it would try to break the link between high gas prices and the amount made by electricity producers.
The Government said the price of gas decides the price of electricity, so as gas prices soared over the last year, many of Britain’s wind farms and solar farms were paid a lot more than normal for their products, even though their costs had not increased very much. The Government said it planned to introduce a “cost-plus revenue limit”, but provided little detail about how this would work.
It also did not say whether cheaper gas generators and coal power plants, which also benefitted from the current set up, would be affected by the new rules. “The precise mechanics of the temporary cost-plus revenue limit will be subject to a consultation to be launched shortly,” the Department for Business, Energy and Industrial Strategy said.
