Why wholesale electricity prices in Great Britain closely track gas markets
Merit order
To meet demand, the grid accepts bids from generators in order of price, starting the cheapest, typically renewables
Lowest bid is
accepted first
Renewables
1
Price
Demand
Grid mix
Renewables do not yet meet 100% of demand, so more expensive gas-fired plants are often the final units brought online
‘Gas 2’ meets demand
Gas
2
Gas
1
Nuclear
1
Renewables
1
2
3
Price
Demand
Price setter
The price bid by the final generator becomes the standard rate paid to all for that period
‘Gas 2’ sets price paid to all
Gas
2
Price
Demand
Merit order
To meet demand, the grid accepts bids from generators in order of price, starting the cheapest, typically renewables
Lowest bid is
accepted first
Renewables
1
Price
Demand
‘Gas 2’ meets demand
Grid mix
Renewables do not yet meet 100% of demand, so more expensive gas-fired plants are often the final units brought online
Gas
2
Gas
1
Nuclear
1
Renewables
1
2
3
Price
Demand
‘Gas 2’ sets price paid to all
Price setter
The price bid by the final generator becomes the standard rate paid to all for that period
Gas
2
Price
Demand
Merit order
To meet demand, the grid accepts bids from generators in order of price, starting the cheapest, typically renewables
Lowest bid is
accepted first
Renewables
1
Price
Demand
‘Gas 2’ meets demand
Grid mix
Renewables do not yet meet 100% of demand, so more expensive gas-fired plants are often the final units brought online
Gas
2
Gas
1
Nuclear
1
2
Renewables
1
2
3
Price
Demand
‘Gas 2’ sets price paid to all
Price setter
The price bid by the final generator becomes the standard rate paid to all for that period
Gas
2
Price
Demand
Merit order
To meet demand, the grid accepts bids from generators in order of price, starting the cheapest, typically renewables
Lowest bid is
accepted first
Renewables
1
Price
Demand
‘Gas 2’ meets demand
Grid mix
Renewables do not yet meet 100% of demand, so more expensive gas-fired plants are often the final units brought online
Gas
2
Gas
1
Nuclear
1
2
Renewables
1
2
3
4
Price
Demand
‘Gas 2’ sets price paid to all
Price setter
The price bid by the final generator becomes the standard rate paid to all for that period
Gas
2
Price
Demand
Merit order
To meet demand, the grid accepts bids from generators in order of price, starting the cheapest, typically renewables
Lowest bid is
accepted first
Renewables
1
Price
Demand
Grid mix
Renewables do not yet meet 100% of demand, so more expensive gas-fired plants are often the final units brought online
‘Gas 2’ meets demand
Gas
2
Gas
1
Nuclear
1
Renewables
1
2
3
Price
Demand
Price setter
The price bid by the final generator becomes the standard rate paid to all for that period
‘Gas 2’ sets price paid to all
Gas
2
Price
Demand
Merit order
To meet demand, the grid accepts bids from generators in order of price, starting the cheapest, typically renewables
Lowest bid is
accepted first
Renewables
1
Price
Demand
‘Gas 2’ meets demand
Grid mix
Renewables do not yet meet 100% of demand, so more expensive gas-fired plants are often the final units brought online
Gas
2
Gas
1
Nuclear
1
Renewables
1
2
3
Price
Demand
‘Gas 2’ sets price paid to all
Price setter
The price bid by the final generator becomes the standard rate paid to all for that period
Gas
2
Price
Demand
Merit order
To meet demand, the grid accepts bids from generators in order of price, starting the cheapest, typically renewables
Lowest bid is
accepted first
Renewables
1
Price
Demand
‘Gas 2’ meets demand
Grid mix
Renewables do not yet meet 100% of demand, so more expensive gas-fired plants are often the final units brought online
Gas
2
Gas
1
Nuclear
1
2
Renewables
1
2
3
Price
Demand
‘Gas 2’ sets price paid to all
Price setter
The price bid by the final generator becomes the standard rate paid to all for that period
Gas
2
Price
Demand
Merit order
To meet demand, the grid accepts bids from generators in order of price, starting the cheapest, typically renewables
Lowest bid is
accepted first
Renewables
1
Price
Demand
‘Gas 2’ meets demand
Grid mix
Renewables do not yet meet 100% of demand, so more expensive gas-fired plants are often the final units brought online
Gas
2
Gas
1
Nuclear
1
2
Renewables
1
2
3
4
Price
Demand
‘Gas 2’ sets price paid to all
Price setter
The price bid by the final generator becomes the standard rate paid to all for that period
Gas
2
Price
Demand