Electricity: Prices

(asked on 26th February 2025) - View Source

Question to the Department for Energy Security & Net Zero:

To ask the Secretary of State for Energy Security and Net Zero, for what reason the Government uses the marginal cost pricing system for electricity.


Answered by
Michael Shanks Portrait
Michael Shanks
Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
This question was answered on 7th March 2025

The wholesale electricity market, like most commodity markets worldwide, is based on marginal pricing. This reflects the value of consuming or generating an additional unit of electricity at any given time and ensures that generators increase or decrease their output to meet demand.

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