Energy Independence Bill explained as Britons could get cheaper electricity on windy and sunny days

Households could soon pay less for electricity at certain times of the day under new Government plans aimed at cutting energy bills and boosting the use of renewable power.

The proposals would allow consumers to access cheaper electricity when wind and solar farms are generating more energy than the UK needs.

New legislation unveiled in the King’s Speech would introduce a system offering lower energy prices during periods of excess renewable electricity production, such as bright and windy days.

Under the proposed Energy Independence Bill, households would benefit from reduced rates when surplus power from solar panels and wind turbines is flowing into the national grid.

The Government said the measures are intended to help Britain move away from the "fossil fuel rollercoaster" by relying more heavily on domestically produced clean energy and increasing electrification across the economy.

The legislation would also remove fees currently charged to households that export electricity back to the grid, including homeowners with rooftop solar panels, giving consumers greater control over their energy costs.

Landlords would also be required to invest in energy efficiency improvements for rental properties under the plans.

The bill establishes the framework for a dedicated warm homes agency, which will oversee a £15 billion initiative focused on electrifying British homes and providing targeted assistance to low-income households and those most at risk of fuel poverty.

Beyond domestic measures, the legislation contains provisions to accelerate the rollout of offshore wind farms and hydrogen technology by reforming existing market structures and regulatory frameworks.

Officials indicated the bill aims to eliminate "unnecessary delays" in constructing the grid infrastructure essential for expanding clean power capacity across the country.

At present, when generation exceeds demand on sunny, windy weekend days, grid operators must pay producers to curtail output, driving up consumer costs and squandering available clean energy.

The King's Speech additionally announced a Nuclear Regulation Bill intended to usher in what ministers described as a "golden age of nuclear power" through overhauled and simplified rules for new reactor construction.

Measures shifting three-quarters of subsidies for older renewable energy schemes from household bills to general taxation will become permanent, delivering average savings of £90 per consumer.

Separate legislation encourages these legacy renewable projects, which currently receive payments above wholesale electricity prices, to transition towards long-term fixed-price contracts rather than rates inflated by gas market volatility.

To incentivise this shift, the government is raising the electricity generator levy from 45 per cent to 55 per cent, a tax originally introduced to capture windfall profits earned by some renewable operators when gas-linked energy prices surged.

Gordon and Buchan MP Harriet Cross launched a fierce attack on the government's approach to North Sea energy, describing Labour's refusal to issue new oil and gas licences as "delusional and quite frankly, utter madness."

"Workers, families and businesses across the North East of Scotland are rightly furious with this government's disdain for our vital oil and gas sector," she said, warning that blocking licences would increase import dependency, endanger employment and push prices higher.

The Scottish Conservative MP argued that amid Middle Eastern conflict threatening energy security, prioritising foreign production over domestic jobs was "ludicrous."

Rachel Fletcher, Director of Economics and Regulation at Octopus Energy, welcomed the grid export reforms, stating: "People can now be even more confident buying EVs and home batteries cutting their bills whilst making the grid cheaper and more efficient for everyone else too."

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