Natural Gas Sets 85% of British Electricity Prices Despite Renewable Growth

The British electricity market operates on a marginal pricing mechanism whereby the tariff for all electricity produced at any given moment is determined by the most expensive source mobilized to meet demand. Although natural gas represents only about 25% of national electricity production, it sets prices roughly 85% of the time. This mechanism directly exposes household bills to fluctuations in the international gas market, including tensions far removed from British territory.