The UK government will offer voluntary long-term fixed-price deals to electricity generators not already operating under the Contracts for Difference scheme as it looks to get a grip on escalating electricity bills.
The Wholesale Contract for Difference (WCfD) mechanism will offer renewables operators the option to accept a fixed price for the electricity they generate in exchange for giving up forward wholesale revenues.
The scheme will be launched later this year with a view to running an allocation process in 2027.
The 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”, according to energy department DESNZ.
It said that around 30% of the UK’s renewable energy fleet could be in line for the WCfD, with assets operating under the legacy Renewables Obligation scheme able to exchange their wholesale revenues for a fixed price CfD.