How many people are aware that cheaper to produce energy is priced in line with the most expensive form of fossil energy, (which is gas)?
The piece below explains what happens and points out the savings if renewable energy was priced independently from fossil energy. It also points out the dangers of higher prices if we have another energy crisis.
Worth remembering that Reform UK is against renewable energy, something that could be used against them, should Labour have the balls to address this pricing issue.
Ministers are under pressure to fix Britain’s broken energy market and save households hundreds of pounds on bills.
Eco-tycoon Dale Vince is calling on the government to axe the “utterly mad” rule that prices renewable energy based on the international cost of fossil gas.
The UK wholesale market uses a system where electricity is priced to match the most expensive energy type.
That is usually gas taken from underground – and in 2023, the Green Britain Foundation found the price link added £43billion to energy bills, or an average of £367 for every UK household.
If energy prices returned to their 2022 high, it would add £741 to the average bill – even if homes used mostly clean electricity. Ecotricity founder Mr Vince, who has donated millions to Labour, said: “Labour needs to fix Britain’s broken energy market if it wants to bring down energy bills.
“We’ve got a dodgy market mechanism that ties the price of all electricity to the most expensive source, nearly always fossil gas – mostly imported, and wildly volatile in price. This utterly mad system has been costing us billions.
“I’m waiting for a reply from Keir Starmer and Ed Miliband. Why won’t they break the link now and slash bills?” Renewable energy is now getting cheaper to produce but Mr Vince warned that without change, the UK will continue to be vulnerable to market shocks such as the surge after Russia invaded Ukraine in 2022.
He added: “By breaking this link, we can become truly energy independent, not just making the energy we need here, but pricing it here too.”
Consumer champion Martin Lewis recently supported the idea, posting online: “We need to delink our electricity prices from the gas price urgently.”
The Department for Energy Security and Net Zero said: “As long as Britain is exposed to global fossil fuel markets, we will be vulnerable to energy price rises over which we have no control.
“We’re looking at market reform, with consumers at the heart of our approach.”
