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Cake day: October 4th, 2023

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  • UK’s uniform pricing is intended to ensure renewables are artificially profitable, incentivising more production. In most other countries, suppliers charge competitive rates, and brokers buy on an open market. This allows demand-based generators (like gas) to charge more during high demand periods (when wind isn’t blowing and sun isn’t shining). The flip side of this is that prices crater during high wind and sun periods. This leads to volatility which can be smoothed with futures contracts. The net effect is that renewables become less profitable, but consumers pay a lot less for electricity.

    The UK needs to restructure their energy market to better align with the rest of Europe. It would significantly reduce prices for everyone.