Renewable generators – why wait to take back control of your energy prices?

The King’s Speech trailed the government’s upcoming Energy Independence Bill, which Energy Secretary Ed Miliband says will help ‘take back control of our energy’. Sounds good – but why wait on legislation? Renewable generators can take control today by sidestepping the wholesale market.

Wholesale energy volatility causes uncertainty for generators

Miliband continued: “After the second fossil fuel crisis in half a decade, our clean power mission is the only way to bring down bills for good and take back control of our energy”.

We agree. Renewables are the only form of energy not subject to the geopolitical price shocks that have rocked the fossil fuel markets with wearying regularity. In 2020, we had the shock of Covid-19, which slashed electricity demand and sent spot prices as low as £24.

Then in 2022, Russia invaded Ukraine and switched off 80 billion cubic metres of pipeline gas supplies to Europe. The knock-on effect was GB prices that hit as high as £511.20/MWh in August 2022, versus around £73-85/MWh a year earlier.

And then, in 2026, we had the (still ongoing) conflict in the Middle East centred on Iran and the Strait of Hormuz. Prices that hovered around £70/MWh at the start of the year shot past the £100 mark by the end of March – nothing like the increases in 2022, but still a significant spike.

In some cases, these big moves represent a windfall for generators selling into the wholesale markets. In others, they become dire circumstances. In both cases, this extreme volatility represents something that’s always a challenge for business: uncertainty.

Uncertainty is caustic to renewable energy generators and their financial backers – hence the attraction of subsidies such as Contracts for Difference (CfDs). It’s all well and good to enjoy excess profits when gas price spikes pump up the clearing price, but it’s not a bankable business model. For those financing new renewable projects or re-financing existing ones, this uncertainty can be a major disadvantage.

Why legislation isn’t moving fast enough

Against this backdrop, it’s easy to see why the Energy Independence Bill sounds attractive. But the fact is that, for many generators facing these challenges today, it may be help that arrives too late.

The Bill was trailed in the King’s Speech, indicating it is a priority for the government over the coming year – but we don’t know when in the year. Other things may take priority, and unforeseen events may skew timelines further.

And even if the Bill is top of the legislative agenda, it won’t be quick to arrive. First, it must be drafted, then pass in the House of Commons, then pass in the House of Lords (with potential amendment back and forth). Then, once it passes, it must be implemented, which could itself take years.

This is all of course assuming that internal government politics and a potential leadership change don’t scupper the Bill before it’s even drafted.

To be clear, this isn’t a criticism of the policy or the government – just an observation that markets move much faster than legislation.

How renewable generators can take control now

Every day generators stay dependent on the wholesale market is another day they endure exposure to unpredictable geopolitical risk. They may be lucky, but luck doesn’t usually hold forever.

What if instead, generators could opt-out of the wholesale market chaos entirely? What if there was another option?

That’s what we’ve built at UrbanChain. Our energy operating system connects generators directly with energy users, allowing generators to pre-agree prices and gain stability. Our focus on local matching, reduction in middlemen, and incentive sharing for small generators means energy pricing that’s not only stable, but attractive to generators and affordable to users.

So why wait to take back control of your energy prices?