[MagnumOpus]

“Marginal pricing” is just how a market economy works.

If there weren’t marginal pricing, nobody in the private industry would build more wind farms or submarine power lines or battery capacity - which are lucrative because they produce peak-time power cheaper than imported gas — and these are the things that will drive power prices down eventually.

[bee_rider]

It sounds like there’s some sort of rule in the UK where al of the suppliers have to charge the same price per watt (or something), and they’ve named this rule “marginal pricing”? So, it is not entirely the same as a market based pricing.

Whether it is better or not, I have no idea. One could probably see an argument for allowing renewables to price themselves below the sustainable rate for petrochemical based fuels—let them outcompete based on price. Of course that gives them less money to reinvest.

On the other hand, power grids are never entirely market based; the grid needs some dispatchable power for stability sake, and it is hard to get consumers to express their tolerance of power outages in terms of how much extra they’ll pay to keep unused plants in reserve…