B

Baroness Hayman of Ullock (Lab)

Speaking in the House of Lords on 4 November 2025

Debate

Energy Market Reforms

Contribution

My noble friend asks about marginal pricing and refers to gas, because gas and electricity prices have been coupled together for many years. The market currently operates on the principle of marginal pricing, and the cost of electricity often tracks the cost of gas because gas generation frequently sets the wholesale price. It is a complex area. There are good reasons why the electricity market operates on that basis. Comparable countries tend to operate in this way as well. Over time, we need to rely less on gas, which means that electricity prices will become increasingly detached from the price of gas and be more frequently set by other generation, such as renewables. We see that as the way to bring prices down to support vulnerable people and to enable them to pay their bills. That is why our focus is on increasing renewable energy.

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