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Ripped Off: How UK Homeowners Are Paying Gas Prices for Wind Energy

Mars · 2025-01-14T10:29:34Z

It’s 2025. You can whip out your smartphone, open an app and see exactly where the UK’s power is coming from in near real-time. Wind turbines are spinning, solar panels are soaking up rays, hydroelectric is pumping and renewable energy is surging into the grid. So why on earth are UK homeowners still paying electricity prices dictated by gas – the most expensive fuel? It’s ridiculous, outdated and flat-out unacceptable. The Marginal Pricing Model: A System Stuck in the Past The UK’s marginal pricing model, a relic from the privatisation of energy companies in the late 1980s, determines electricity prices based on the costliest fuel used to meet demand within any half-hour period – almost always gas. Even if renewables generate the bulk of the power during that time, the price is still almost always dictated by gas. In effect, consumers are paying for the most expensive option, regardless of whether cheaper, cleaner energy sources made up the majority of the electricity supply. This outdated and unfair pricing system might have been justifiable in the past, but today? It’s a slap in the face for homeowners, especially those who have made the effort to adopt sustainable heating systems like heat pumps, only to find themselves penalised by a model that ignores the reality of the energy mix. Renewables Are Cheaper – But We’re Not Seeing the Benefits Renewable energy sources like wind and solar are now cheaper to generate than fossil fuels. As of 2024, over 40% of the UK’s electricity came from renewables. Yet, thanks to the marginal pricing model, we’re not reaping the rewards of this cleaner, more affordable energy. Instead, renewable generators are paid the same inflated rates as gas suppliers, and we, the consumers, are footing the bill. Real-Time Data Proves This Model Is Outdated Apps and websites already show us exactly how much electricity is being generated from renewables versus gas at any given time. Why can’t our billing reflect this? Instead, we’re stuck with a pricing model that lumps cheap and clean energy together with expensive fossil fuels. It’s a lazy, one-size-fits-all approach in a world where customisation and precision have become the norm. Electricity generators, including those using renewables, benefit from inflated prices due to the marginal pricing model. This allows companies to rake in profits while households bear the brunt. The Spark Gap: Penalising the Sustainable Choice To make matters worse, electricity is burdened with levies and taxes that are ostensibly intended to support the renewable energy transition. Meanwhile, gas remains comparatively cheap, creating a significant spark gap that actively discourages homeowners from switching to electric heating systems like heat pumps. While we acknowledge that addressing this imbalance won’t be a politically easy decision (given that so many homes in the UK still rely on gas) a solution must be found. Leaving this disparity unchecked undermines the government’s own climate goals and punishes those trying to make greener choices. It’s not just bad policy; it’s a glaring failure of leadership. Why This Must Change The UK government needs to scrap the marginal pricing model and adopt a fairer system that reflects the real costs of energy generation. Here’s what must happen: Real-Time Billing: Use existing technology to charge consumers based on the actual mix of energy sources being used. Fair Levies: Shift green levies from electricity bills to gas bills to encourage cleaner energy use. Price Transparency: Make it clear to consumers where their money is going and why. UK homeowners are already struggling with rising energy costs. Being forced to pay over the odds for clean energy while being tied to an outdated pricing model is beyond unacceptable – frankly, it’s scandalous.

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Jeff

(@jeff)

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10/07/2025 9:15 am

Posted by: @toodles

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@jeff I am very sorry, but with my very limited sight, that report is definitely TL and therefore, I DR, would anyone care to waste their valuable time reading it and provide a brief summary here please? I would be most grateful! Regards, Toodles. (Are Government reports financed by their word count I wonder?)

Sure.

Basically:

1. Zonal wholesale pricing isn't going ahead. Too much risk. I won't dwell on the points as it is what it is now, no zonal wholesale pricing

2. There are going to be changes behind the scenes regarding connection and network costs to encourage generation and storage to be located where it is needed rather than the rather ad hoc approach

3. There is going to be a new Strategic Spatial Energy Plan (SSEP) again to get storage and generation in the right location.

4. Continued investment in wires to get electricity moved around the country.

4. There is going to be further work on potential Power Purchase agreements to encourage new data centers etc to be located where there is excess electricity.

There are some other points but that is basically it.

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Toodles

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10/07/2025 9:48 am

@jeff Many, Many thanks Jeff, that is far easier to read! I hope they can manage to cause Data Centre plans to evolve around ‘power plenty’ areas - it makes such good sense! OE’s. Greg Jackson will be disappointed about no zonal pricing though. Regards, Toodles.

Toodles, heats his home with cold draughts and cooks food with magnets.

👍

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Jeff

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10/07/2025 4:31 pm

Posted by: @toodles

↑

@jeff Many, Many thanks Jeff, that is far easier to read! I hope they can manage to cause Data Centre plans to evolve around ‘power plenty’ areas - it makes such good sense! OE’s. Greg Jackson will be disappointed about no zonal pricing though. Regards, Toodles.

Short video from Greg on the announcement

https://twitter.com/g__j/status/1943259384550719827

This post was modified 6 months ago 3 times by Jeff

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Toodles

(@toodles)

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11/07/2025 8:46 am

@jeff And now for something I have never noticed before! I have had a few days recently where no grid energy has been used by us at all; on those days, instead of the usual 42 pence standing charge, it is a charge of 2 pence. Umm anyone else experienced this? Regards, Toodles.

Toodles, heats his home with cold draughts and cooks food with magnets.

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ChandyKris

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11/07/2025 9:51 pm

@toodles I have noticed that on some.days it takes a while to update the costs on the Octopus energy usage page or in the app. If not, I would be keen to try this out too. We import very less from the grid from May to August, and the standing charges make.up the most of the electricity bill. I would happily forgo a bit of export payments for no standing charges!

16 * 435 watts PV
13 kWh Growatt battery
1 EV - Mercedes EQB
6 kW Aira Heat Pump

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Toodles

(@toodles)

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12/07/2025 10:37 am

@chandykris I shall keep my eye on the OE app to see how this pans out but, as far as I am aware that SC is sacrosanct and cannot be by-passed by any mere mortals, therefore I fear it may yet prove to be a delay or error in the accounting system (perhaps Kraken is feeling the heat right now!)😉. Regards, Toodles.

Toodles, heats his home with cold draughts and cooks food with magnets.

😂

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ChandyKris

(@chandykris)

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12/07/2025 12:17 pm

@toodles Few days in the year when I wish we had gone for an A2A heat pump than the current A2W system!

16 * 435 watts PV
13 kWh Growatt battery
1 EV - Mercedes EQB
6 kW Aira Heat Pump

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Toodles

(@toodles)

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12/07/2025 1:17 pm

@chandykris Horses and beggars…. 😉

Toodles.

Toodles, heats his home with cold draughts and cooks food with magnets.

😂

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Batpred

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20/10/2025 9:24 am

Posted by: @abernyte

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I thought that they brought in CfD to stop this merry go round, but the clowns set the strike price too low and all the value now flows back to the generators meaning that the consumer ends up paying for over priced energy from the spot market.

It is a crazy situation. It also seems not enough 400kv grid upgrades were made, and at least no sizeable connection from farms to the Netherlands!

An observer like me is now considering solar. This is hardly DIY and it does not deliver power in the months that I will need.

And given the tensions and potential pressure to achieve quick results, will the grid stability (which is hardly perfect for me) suffer? So having the ability to survive a few hours outage is not something to overlook.

16kWh Seplos Fogstar battery; 8kW Solis S6-EH1P8K-L-PLUS hybrid inverter; Ohme Home Pro EV charger; 100Amp head, HA lab on mini PC

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