Powering Britain’s Future: Staying the Course on Renewables

Too often, the energy debate is framed as a trade-off between affordability and the transition to net zero. In reality, renewables are increasingly central to delivering both. Reducing the UK’s exposure to volatile gas markets is essential not only for decarbonisation, but for long-term affordability too.

The two-way, inflation indexed Contracts for Difference remains one of the clearest examples of a policy framework that can unlock investment while protecting consumers, by effectively financially ‘decoupling’ wholesale electricity prices from gas. It gives developers confidence to invest at scale, while helping shield billpayers from price spikes. Analysis by Aurora Energy Research finds that procuring offshore wind capacity up to a value of £94/MWh is at least neutral for bill payers – if the price is lower, overall bills will fall. The latest CfD round, Allocation Round 7 (AR7), procured a record 8.2 GW of fixed-bottom offshore capacity at an average price of just over £91/MWh, proving that renewables can provide long-term value.

We therefore welcome the recent announcement by the Government to accelerate this decoupling further by introducing voluntary CfDs for existing low-carbon generators not already on contracts. Giving generators the opportunity to move onto a more stable two-way, fixed-price CfD - a tried-and-tested market instrument understood by investors - has the potential to reduce the overall cost of renewable support schemes, without fundamentally disrupting the market or investor confidence.

The UK electricity market is entering a significant period of reform. These debates are complex, but the implications are clear: the decisions taken now will shape consumer bills, investor confidence and long-term security of supply.

As reform progresses, we must not lose sight of what has made the UK a global leader in renewable investment. Stable, investable frameworks and clear market signals remain essential to delivering projects efficiently and at lowest cost. The priority should be evolution, not disruption: building on what works, preserving confidence and avoiding unnecessary uncertainty that risks pushing up costs for consumers and slowing delivery.

The UK remains a global leader in renewable energy, with strong momentum across the sector and a proven track record of delivery. But this is also a pivotal moment. The pressure to address short-term affordability challenges is understandable, yet we must be careful not to take decisions that undermine the long-term investment needed to solve them.

The priority now must be stability, not churn. We need a clear and predictable framework that builds on what works, supports timely grid delivery and gives industry the confidence to keep investing. By staying the course, the UK can secure an energy future that is not only cleaner, but more resilient, affordable and prosperous.