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UK energy prices are set by the most expensive energy source in the mix that contributes to the National Grid, which happens to be gas.
by cjs_ac 10mo ago
UK energy prices are set by the most expensive energy source in the mix that contributes to the National Grid, which happens to be gas.
- Nextgrid 10mo agoWhich also sets broken incentives where nobody (not even renewables) are actually incentivized to dethrone gas/etc as it would reduce their own profit margin.
- ViewTrick1002 10mo agoBut everyone are incentivized to build another wind farm, solar plant, battery etc to make profit on the current fossil gas based margins. Pushing the price lower for more hours. Equilibrium is met when new production becomes too expensive vs. the existing profit potential. All resource markets globally run on marginal price. The other option for electricity would be that everyone instead does their own research and predicts the clearing price leading to even higher waste and more volatility.