Miliband's de‑link plan offers modest bill protection
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- Ed Miliband announced a de‑link plan for gas and electricity prices, moving older wind and solar projects from the Renewables Obligation to fixed‑price contracts for difference (CfDs), but gave no forecast for bill savings.
- The plan creates a “prediction‑free zone” on bills and may raise the windfall tax for projects that remain on existing contracts.
- Callum MacIver of Strathclyde University said the measures could modestly insulate electricity prices from gas price shocks but missed an opportunity for near‑term bill reductions, especially for businesses.
- The government also pledged to accelerate electric‑vehicle and heat‑pump uptake, emphasizing the need for a demand‑side plan.
- Older offshore wind farms under the RO scheme receive about £130/MWh plus wholesale prices (~£70/MWh), whereas new projects get £91/MWh under CfDs, limiting potential bill cuts if only wholesale rates are fixed.
- The Renewables Obligation currently accounts for roughly 30% of UK electricity generation and will phase out over the next decade, making bill changes hard to achieve.
- Miliband indicated he is more likely to approve the Jackdaw gasfield than the Rosebank oilfield.
Why it matters: Households and businesses gain a modest buffer against sudden electricity price spikes, but the limited scope of the reform means overall bill reductions will be small, while the renewable sector continues to receive generous legacy subsidies that will only phase out over a decade.
