The current structure for pricing wholesale electricity is outdated and is penalising consumers.
The last few years have seen conflicts, geopolitical tensions and supply issues impact traditional sources used to generate energy resulting in the UK having to pay higher prices for short term supply top ups. This has ensured electricity supplies have been available, however has had a larger effect to prices than many realise.
The current set up means that wholesale prices are driven by the spark price or the highest price of generation source required over the day, which is then applied throughout. The result of this is sources with fixed costs such as renewable generators which now make up over 30% of Britain’s power supply have seen massive windfalls.
Key measures announced in April 2026 by the UK government have extended the levy on generators, however more importantly that they are moving to break the link between the spark price method to new fixed-price agreements, which they believe will offer customers greater protection and reduced prices.
