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This is a good read that explains a lot of how the market works https://www.politico.eu/article/why-europes-electricity-is-so-expensive/amp/ https://www.politic

• ZeroGravitas 4y ago
  It's designed for fossil fuels not renewables. Renewables bid low, because that accurately reflects their costs, which the bidding system is design to reveal, like an auction. The only problem is that gas is scarce and really expensive. And people seem allergic to any solution which isn't to subsidize the cost of gas, driving up demand.
  • stu432 4y ago
    And the renewables get the highest price, which will always be higher than their production costs... It's designed to repay investment into non fossil fuel power supply that don't have those variable input costs.
    • ZeroGravitas 4y ago
      It is designed to extract credible bids from energy suppliers and minimize costs. The wider range of prices is the new thing, but the cheaper sources getting paid at the marginal price was always the intention. It stops people inflating their bid, which renewables could do if they wanted to queue jump, they'd just be risking that they are the most expensive renewable and they don't get picked, and get paid zero. It incentives the lowest cost producers (as long as it's regulated properly, see the Australian experience with gas cartels abusing the system).