What action's being taken to improve the energy market and when might we see real progress on that?

dave2319

I see Martin recently met with people to discuss radically improving the energy market. Do we know more about what they're working to improve and when we might see some real progress with that?

glynbristol

The real reason electricity prices are so high is because of the broken model for rewarding energy generators .

According to EDF, "the price you pay for your power is set by the marginal generation unit. By this we mean whatever type of power, from whatever source, met the peak demand". So what they are saying is that if I am a solar generator and am quite happy supplying energy to the grid at say 2p a unit, if there is a surge and gas comes on line for 4 hours at 20p a unit, I will get paid 20p - ( for my electricity provided during that period). That is why the cost of electricity (from all sources)  quadruples when the price of gas quadruples, even though the mix of electricity may only be 15% from gas. (This also explains why those on a 100% renewals tariff, also pay the quadrupled price!!!!!)  So why doesn't the govt step in and change that formula. Can Martin campaign to get the govt to look at this broken pricing model.

 E.g If the marginal generation unit comes on line (20p) the amount other generators paid is say double their normal rate or 20p whichever is the greater,  and that is very generous.!!!.

(Note  can provide the EDF link, your system wont let me insert it)

Former_MSE_Gary

Hi,

Yes, MSE, Martin and representatives from charities Citizens Advice, National Energy Action and StepChange met with CEOs of Ovo, British Gas, Octopus, E.on, EDF and Shell Energy in July to discuss the energy crisis.

The aim was to work together on the low-hanging fruit, without government or regulators. You can see the agreed actions from that meeting in this MSE news story.

A senior level working group is meeting regularly and making good progress on the agreed actions, and we hope to be able to share outcomes more widely after the next meeting of CEOs in September.

Separately, Ofgem is looking into the energy market more widely and MSE regularly responds to its consultations.

Thanks,

Gary

MSE_Laura_F

I've merged together @dave2319 and @glynbristol's questions, since they're both about changing the energy market.

Thanks, MSE Laura F