Green Party MPs have pressed Energy Secretary Ed Miliband to move beyond merely investigating the proposal to decouple electricity prices from gas and instead implement decisive action. The MPs argue that the current system, where gas prices set electricity costs, leaves households vulnerable to volatile global gas markets.
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In a letter led by Green MP Carla Denyer and co-signed by four others, the party calls on the government to commit fully to breaking the link between gas and electricity prices. They warn that ongoing reliance on this pricing model perpetuates what they call a “rigged system” and contributes to inflated energy bills for consumers nationwide. The Greens have also submitted an Early Day Motion to Parliament seeking broader Labour support.
The UK’s electricity market currently operates on a marginal cost pricing system, where the most expensive power source required to meet demand sets the wholesale price. Gas-fired power stations typically set this price, despite renewables supplying a growing share of electricity. Miliband acknowledged in a Labour MPs meeting that decoupling would be “complicated but possible,” though no official government position currently exists.
Denyer, a former offshore wind engineer, emphasized that “looking into it” is insufficient given the threat of another fossil fuel price shock. She urged the government to provide a clear timeline for parliamentary updates on decoupling plans.
The Department for Energy Security and Net Zero responded, stating that the government’s strategy to reduce energy bills relies on increasing renewable energy supply to lessen gas’s role in electricity pricing. The department noted renewables have already reduced the influence of gas on wholesale prices by about a third since the early 2020s.
Experts supporting decoupling highlight that even with increased renewable generation, households may not see bill reductions without structural market changes. A recent report from the Common Wealth think tank recommended emergency legislation to have the National Energy System Operator act as a single buyer, removing renewables from the wholesale market and paying them fixed prices.
Miliband’s approach to decoupling remains cautious amid political and fiscal considerations, balancing commitments to clean energy with pressures on energy affordability and security.
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