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UK: Increased and extended electricity generator levy

Effective July 1, 2026

april 30, 2026

HM Treasury on April 21, 2026, announced changes to the electricity generator levy (EGL), designed to break the link between gas and electricity prices.

The EGL was introduced from 2023 and applies to businesses generating electricity from nuclear, renewable, and biomass sources when their revenue is above a benchmark price, which will be the case when gas prices are high as they can sell the electricity they generate at higher prices.

The changes announced were:

  • The rate of EGL will increase from 45% to 55% effective July 1, 2026
  • EGL will be extended past its current end date of April 2028

The changes are intended to encourage a switch for renewable obligation generators onto “contracts for difference,” which provide a fixed price for low carbon generators not subject to EGL.

The changes to EGL were part of a wider package of announcements from the government in response to the current instability in the Middle East.

Read an April 2026 report prepared by the KPMG member firm in the UK

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