Electricity Generation: Taxation
The question
To ask the Chancellor of the Exchequer, with reference to her Department’s press release entitled Decisive action to break influence of gas on electricity prices, published on 21 April 2026, what assessment her has made of the potential impact of the (a) increase of the rate and (b) the duration of the Electricity Generator Levy on household bills.
Answered by Dan Tomlinson
The government does not expect the increase in the Electricity Generator Levy (EGL) rate from 1 July to increase bills for consumers. The EGL applies only to existing, older renewable generators when wholesale prices are above a benchmark price of £82.61 per MWh. These generators receive larger revenues when wholesale prices rise with gas prices, without commensurate increased costs.
Increasing the EGL will ensure a proportion of any exceptional revenue that generators receive because of the conflict in the Middle East is available to Government to support businesses and households with their cost of living.
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