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Green shares spark as UK lifts electricity windfall tax to speed up gas price delinking
By Frank Prenesti
Date: Tuesday 21 Apr 2026
(Sharecast News) - Renewable sector shares sparked on Tuesday as the UK government said electricity generators will face higher windfall taxes as it pushes them to accept fixed-price contracts in an accelerated effort to protect consumers from gas market shocks such as the Iran war.
Generators will pay 55% tax on excess profits, up from the previous level of 45% as part of a joint initiative between the Department of Energy Security and the Treasury to speed up plans to delink gas and electricity prices.
The funds raised will help the government to support households during an energy crisis, officials said. Britons pay some of the highest electricity prices in the world because gas-fired power stations usually set the wholesale price across the market.
"Instability in the Middle East has shown that Britain's reliance on international fossil fuel markets leaves families and businesses exposed to volatile gas prices, driving the cost-of-living crisis even though much of the country's electricity comes from cheaper renewables and nuclear," the departments said in a joint statement with the prime minister's office.
"When wars, geopolitical tensions or supply shocks abroad push up global gas prices, electricity bills rise with them, exposing families to crises they have no control over."
Since late 2022, generators have faced a 45% tax rate on electricity sold at market prices above £75 a megawatt hour through the EGL put in place after the war in Ukraine led to record gas market prices across Europe.
Energy Secretary Ed Miliband said renewable power stations that receive subsidies under the legacy "renewables obligation" scheme would be encouraged to sign up to "contracts for difference", under which the government guarantees a fixed electricity price regardless of the wholesale price, funded by a levy on consumer bills.
Low carbon generators would continue to receive renewable obligation subsidies as well if they applied for the long-term contracts that cover about 30% of Britain's power supply.
Shares in SSE, the renewables-focused generator and distributor which operates wind farms and hydroelectric stations, jumped 3%, while BluefieldSolar Income Fund, TRIG, Greencoat UK Wind, and Foresight Environmental Infrastructure also made gains.
Reporting by Frank Prenesti for Sharecast.com
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