The Liberal Democrats propose a significant reform to the UK's energy billing system, advocating for a new payment model called 'pot zero' for renewable energy projects. This proposal involves negotiating a guaranteed strike price with renewable firms to break the dependency on gas prices. The strategy aims to halve household energy bills by 2035. Currently, only 15% of renewable generators are on Contracts for Difference (CfD), while the rest are tied to gas pricing. The Lib Dems want to accelerate the transition to this model across all renewable energy sectors to lower costs for consumers.
The Liberal Democrats have backed a plan to reduce household energy bills by changing how new renewable projects are paid for. This initiative, called 'pot zero', involves negotiating a guaranteed price with renewables firms, which could help break the link between electricity and wholesale gas prices, potentially halving bills by 2035. Energy Secretary Ed Miliband has begun transitioning to this model, but the Lib Dems seek to accelerate its implementation across all renewable energy generators.
Sir Ed Davey emphasized the need for a shift as '97% of the time in 2021, the cost of electricity was set by the price of gas.' He noted benefits of the proposed contracts on encouraging investments in renewables and reducing electricity bills.
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