Overview
- Ed Miliband, who told Labour MPs on Monday the change was “complicated but possible,” is examining ways to uncouple power prices from gas to cut household bills.
- Political pressure is rising, with Green MPs sending a letter and tabling an Early Day Motion to push for a firm pledge to decouple prices.
- Under the current marginal pricing system, the cost is set by the last and priciest generator needed to meet demand, and reports say gas set the price about 85% of the time in 2025 despite supplying roughly a quarter of power.
- One option under review is Dale Vince’s “Breaking the Link” plan to pay each generator the price it bids rather than the gas‑set market price, which he says added about £43 billion to bills in 2023.
- Other ideas include taking clean generators out of the wholesale market and putting gas plants on regulated terms, which the Common Wealth think tank estimates could save about £203 per household each year.