The wholesale price of electricity is set by the cost of the type of power that most recently met the peak demand for energy. This means the wholesale price is often determined by the cost of gas even at times when renewables or other sources are generating large parts of the energy supply.58 The Department told us that, as the UK invests in more renewables and nuclear, more power will be generated by technologies with high construction costs relative to low running costs, in contrast to gas-...

The wholesale price of electricity is set by the cost of the type of power that most recently met the peak demand for energy. This means the wholesale price is often determined by the cost of gas even at times when renewables or other sources are generating large parts of the energy supply.58 The Department told us that, as the UK invests in more renewables and nuclear, more power will be generated by technologies with high construction costs relative to low running costs, in contrast to gas-fired power. We asked about the Department’s plans to reform the market in response to these changing dynamics, including how it will uncouple the cost o Type: conclusion | Number: 24 | Response status: not_addressed