There is some market (and regulatory) stupidity but both your cited ones have reasonable cases to be made for them. If you order the bids low to high then pay

There is some market (and regulatory) stupidity but both your cited ones have reasonable cases to be made for them. If you order the bids low to high then pay the highest bid then a) you encourage honest (i.e. lower) priced bids and drive expensive/inefficient plants out the market while encouraging new low price entrants who can guarantee they'll get used (because low bid) and make money, driving the market price lower. The problem is the expensive gas caused by Russian invasions and planning a market pricing mechanism around such events is kind of silly when you can just windfall tax to fix the problem quickly and easily if the energy companies aren't all run by your mates from private school. But also generation ain't the whole cost, there's the grid fees and taxes. The latter made sense when burning coal and now are looking likely to be shifted to gas. Collar prices on wind farms are actually a genius bit of financial engineering, guaranteeing minimum funding in a volatile market at low cost by capping the profits.