What happened

The Department for Energy Security and Net Zero published two decisions on electricity levies on 3 November 2026, both about who pays for green power.

A new way to pay for the Renewables Obligation. The consultation proposes moving the Renewables Obligation (RO), which supports older wind, solar and biomass generators until 2037, to Fixed Price Certificates "no sooner than the start of the 2028/29 scheme year". Today generators sell their certificates (ROCs) to electricity suppliers at whatever price they can negotiate. Under the proposal a central administrator would buy every certificate monthly at a fixed price, starting from the last RO buy-out price plus an uplift, and suppliers would pay a levy quarterly in advance to fund it. The government says the change could protect the scheme from price swings as generators leave it and cut supplier default risk.

The cost to bill payers depends on the uplift. The government's modelling in the consultation document says a 10% uplift could add about £1.9 billion to scheme costs between 2028/29 and 2036/37, a 2% uplift could save about £0.9 billion, and around 4% could cut costs while keeping generators' income broadly the same (2024 prices). The consultation closes at 11:59pm on 12 January 2027.

BICS funding route confirmed. In its government response, DESNZ said it will go ahead with changes to the Contracts for Difference supplier levy so that Exchequer money paid to the Low Carbon Contracts Company offsets the cost of the British Industrial Competitiveness Scheme (BICS). From April 2027 BICS exempts eligible manufacturers from the indirect costs of the RO, Feed-in Tariffs and the Capacity Market. The first Exchequer payment is due no later than 27 November 2026, so it can show in the CfD interim levy rate set in December and in the data Ofgem uses for the April 2027 price cap. The response also notes BICS is partly funded by removing Carbon Price Support from April 2028.

What it means for your business

Every electricity bill carries the RO. Suppliers pass the cost on in your unit rate or as a separate non-commodity charge. For 2026-27, suppliers in Great Britain must present 0.472 ROCs per MWh they supply (0.184 in Northern Ireland), and the buy-out price is £69.34. Our worked example for a business in Great Britain using 50,000 kWh a year:

  • 0.472 × £69.34 = about £32.73 per MWh, or 3.27p per kWh.
  • 50 MWh × £32.73 = about £1,636.42 a year of RO cost in the bill. Actual certificate prices can differ a little from the buy-out price, so treat this as a guide.
  • The same electricity is about 6,548 kg CO2e in Scope 2 at the 2026 UK grid factor. The RO is part of why that factor has fallen: it paid for much of the wind and solar now on the grid.

Nothing changes before April 2028. The Fixed Price Certificate proposal would change how the money flows, not who pays. Whether it ends up cheaper depends on the uplift the government picks after the consultation.

Manufacturers may pay less from April 2027. If you qualify for BICS, the RO, Feed-in Tariff and Capacity Market parts of your bill could be removed. If you don't, the Exchequer funding confirmed today is meant to stop your bill rising to cover them.

What to do now

  1. Manufacturers: check BICS before 30 November. You may qualify if you make products in Great Britain. Use the government's eligibility checker or our BICS check, and read our Budget 2026 energy costs post. Applications close at 11:59pm on 30 November 2026.
  2. Look at your next contract. Ask your supplier or broker whether non-commodity costs such as the RO are fixed or passed through, and how the BICS changes in April 2027 will show on your bill.
  3. Generators, suppliers and investors: read the consultation document and respond by 12 January 2027.
  4. Keep the kWh as well as the £. Your electricity use in kWh is what your carbon report needs, whatever happens to the levies.