Electricity generators threatened with higher windfall taxes in bid to ensure stable prices

Move marks UK government’s most radical attempt to weaken impact of soaring wholesale gas prices on electricity costs Clean energy generation exceeded rise in global electricity demand in 2025 Electricity generators will face higher windfall taxes unless they sign up to long-term fixed-price contracts under UK government plans to protect bill payers from future gas market price shocks, as the Iran war pushes up energy prices. The Treasury will increase a windfall tax on excess profits made by electricity generators in Great Britain from 45% to 55% when gas prices spike. The funds raised will help the government to support households during an energy crisis. The owners of “legacy” renewable energy projects, such as older wind and solar farms, that earn subsidies on top of the market price, will face the higher tax rate from July unless they sign up to contracts that pay a set price for electricity. The move is part of the government’s plan to “delink” the price of electricity from the price of gas. Gas prices currently determine costs on Great Britain’s electricity market around two-thirds of the time, even though renewables make up more than half of generated power. This link is ex