Scrutable

My standard rant about decoupling expensive foreign gas fired generation from the rest of the electricity market is starting to get mainstream attention.

https://www.theguardian.com/environment ... ktank-says

Good, 'bout time.

Since moving to Shropshire, we've been all-electric. And, since we could afford the (poss) higher prices, we decided to buy from a sustainable-only supplier. They also use their profit/surplus to build more wind and solar. Really annoyed me that our tariffs went up and down with the international gas wholesale price. Grrr!!!

Lew Dolby wrote: Thu Mar 19, 2026 11:19 am ...we decided to buy from a sustainable-only supplier. They also use their profit/surplus to build more wind and solar. Really annoyed me that our tariffs went up and down with the international gas wholesale price. Grrr!!!

A few years ago, my employer tried to source its energy from a proper sustainable supplier, rather than a greenwasher. Since we had recently done a project for the dept of energy, under whatever name it had at the time, on what the difference is, we felt particularly expert in detecting the difference. After surveying the options available to us, as a small office in a shared building, our conclusion was that there were only a couple of suppliers making a genuine attempt to be sustainable, the rest were all greenwashers to a greater or lesser degree. But at that particular time, at start of the Ukraine war, things were difficult for the sustainable suppliers, and they were not accepting any new customers, or at least not from the likes of us. Since we did not want to pay money for the usual greenwash, we gave up and bought our energy according to price.

I do feel annoyed that that is permitted for energy companies to make these greenwashing claims. The thought in government is to get people used to the idea of buying sustainable energy, and only later ensure it really is, at a time when the price premium for genuinely sustainable energy is not so large, and the contortions not so difficult. But that day keeps on being delayed, in part because our energy transition remains so far behind schedule. As usual, a powerful lobby exists to seek to maintain the status quo.

bjn wrote: Thu Mar 19, 2026 9:44 am My standard rant about decoupling expensive foreign gas fired generation from the rest of the electricity market is starting to get mainstream attention.

https://www.theguardian.com/environment ... ktank-says

This proposal is not the usual type of split market proposal, rather it is much more highly interventionist. In particular it envisages NESO becoming single buyer of electricity, who then sells on to customers, presumably at some kind of posted tariffs.

The NESO will buy from gas generators according to RAB-based model, in effect bringing gas generators in tothe regulated sector, like water companies, energy transmission and distribution companies, etc. I think competition is always a better idea than that. You are still going to have to pay them what they pay for gas, it doesn't make the gas price spike go away.

For other suppliers, if there is CfD, the more modern arrangement, NESO will buy from them according to that. If they haven't got a CfD, they will get power purchase agreements related to their costs as set out at the time of the subsidy arrangement.

This seems to me to be "Something must be done, here is something, so do it".

Here is Citizens Advice talking about split market proposals, and expressing the opinion that there are risks and downsides with it. This in turn refers to an Oxford IES (Keay and Robinson) explicit proposal for a split market, and also an alternative UCL proposal they call a Green Power Pool.

There's no running away from the high price of gas. To the extent that we burn gas to generate electricity, we are going to have to pay the price of it. The problem is that gas-based electricity prices most of the time are giving non-gas generators, especially the older legacy pre-CfD ones, windfall profits, paid for through high prices to consumers, especially when international crises push up the price of gas.

These older proposals for dealing with this seem more plausible than this Common-Wealth one. The idea of pulling gas generators into a RAB approach seems mad, and an unnecessary feature of addressing the problem, as these older proposals indicate. But as Citizens Advice points out, these older proposals are not without their problems. We also have to remember that we have a lot of interconnectors to the continent and Ireland, that are becoming increasingly important as we decarbonise. Although we have been kicked out of the single European energy market, they have such a market, and we need to be able to interact with it in a market-based way. I do not understand the issues that would arise in relation to such international trade.

This is a long article on subject of gas setting electricity prices but worth reading. One conclusion is that we are already seeing some benefit from higher renewable use.

https://www.carbonbrief.org/qa-why-does ... ternative/

Thank you for that Ivan. I just read the citizen’s advice paper but haven’t read the other two.

I was more highlighting that very wonky details about the problem are now being reported in the wider media rather than advocating for that specific approach to the problem. I’ve argued here and elsewhere that reform would need to involve some kind of market mechanism. I’ve hypothecated about payments to generators calculated by splitting the difference between bid price and marginal price, but have little idea how you would model that (not having the economic modelling chops). This would bring down the average price as cheaper generation was brought onto the market, even with an expensive marginal price and still provide an incentive to invest in cheaper generation.

Protecting the vulnerable folks should simply be done by direct payments rather than loading that complexity onto a market.

FWIW Spain has the standard reverse auction mechanism, but has invested heavily in renewables over the last half decade and has now seen significant drops in energy prices as a result. They are now 32% below the EU average and have decoupled the price of electricity from the price of gas. Gas was setting the price 75% of the time in 2019 and it was down to 19% of the time.

https://ember-energy.org/latest-insight ... enewables/