A new report from Greenpeace has exposed just how much control fossil gas still has over our electricity bills. Despite making up less than 40% of our power supply, gas-fired power stations set the market price nearly every half hour — inflating costs for households and businesses alike.
This happens because of the way our electricity market is designed: a system called marginal pricing, where the most expensive generator sets the price for everyone.
A spokesperson for the End Fuel Poverty Coalition, commented:
“This new analysis makes crystal clear what millions of households already feel: the energy market is still rigged in favour of fossil fuel giants.
“Even as renewable generation grows, gas still sets the price of electricity 98% of the time, handing huge profits to energy companies while driving bills higher for households. It’s a structural failure of the market, not a temporary blip.
“The Government’s current strategy is to sit back and hope that marginal pricing will fade as renewables expand. But hope is not a reform plan. Even in a clean system, expensive gas could still set the price during periods of peak demand and households will continue to pay the price.
“Given the failure of the Government’s electricity pricing reform process to deliver meaningful reform so far, new ideas like the one proposed by Greenpeace and Stonehaven to remove gas plants from the wholesale electricity market and place them into a strategic reserve, need to be looked at.
“The electricity market needs structural change, not minor tweaks or warm words.”