(Alliance News) - UK Chancellor Rachel Reeves has said she and Energy Secretary Ed Miliband are looking at ways to break the link between the cost of electricity and gas prices.
Gas almost always sets the price of electricity under the marginal cost pricing model the UK uses.
Speaking in Washington, the chancellor said: "So, this is something that I've been attracted to for quite some time, delinking electricity and gas prices.
"At the moment, when gas prices are high, we end up paying more for our electricity, even though the cost of producing it doesn't change.
"And so myself and Ed Miliband are now working to come up with a practical way that we can delink those prices.
"It is quite a big change but is absolutely the right thing to do, especially as electricity makes up an increasing part of our energy mix, and we hope, within the next sort of few days, weeks, to be able to give more details on what that looks like."
Miliband has long touted Labour's energy policies and shift to renewables as a bid to get the UK off the "fossil fuel rollercoaster".
Renewables have cut the amount of time gas sets the wholesale price of electricity in Britain by about a third since the early 2020s, according to the Department for Energy Security and Net Zero.
The head of Energy UK said earlier this week that decoupling electricity prices from gas was something that would come gradually with the transition to clean power.
"Over time, that will decrease as we get more renewables on to the system," Dhara Vyas, chief executive of the industry body, said.
Reeves also spoke on Thursday about the North Sea oil and gas tiebacks – satellite wells to exploit existing fields – that the government is encouraging investment in.
The chancellor said: "I announced in the budget last year that we were going to allow tiebacks.
"We're now working through pretty intensely the technical details with the energy companies.
"What tiebacks are is where you use existing infrastructure to exploit a larger geography of oil and gas.
"It is the quickest way to bring on stream more oil and gas, and it's important that we get the detail right, so that companies have the confidence to exploit those resources."
Greenpeace has proposed decoupling by moving gas plants into a so-called regulated asset base to make gas a strategic reserve and reduce its impact on market prices.
Its UK head of politics Ami McCarthy said: "It's absurd to let volatile gas dictate the cost of electricity in this country, and the price shock caused by Trump's reckless war on Iran is just the latest reminder of that.
"As our proposal shows, we could be saving billions every year by taking control of our electricity prices away from the gas industry, and letting bill payers benefit from cheaper, homegrown renewables.
"It's basic common sense, and it's encouraging that the Government is considering it."
By Helen Corbett and Nicholas Lester, Press Association Political Correspondent
source: PA
Copyright 2026 Alliance News Ltd. All Rights Reserved.
