What is a wholesale electricity price?

The Wholesale Electricity Price is the price that is available on the wholesale market and can be purchased or sold within this environment. Suppliers and end users can access these markets to purchase electricity for a future delivery date.

How is electricity priced in the UK?

The price for electricity UK wide is typically priced based on various factors, and the structure can be quite complex. We look at some of the key components that influence electricity pricing in the UK. First of all, we must look at the wholesale market prices. The wholesale market is where electricity generators sell their power to suppliers.

How have wholesale electricity prices changed in the UK?

Wholesale electricity prices have progressed since the early 1990′s when the UK’s electricity industry evolved from a government controlled monopoly to a fully competitive market giving customers the freedom to choose their energy supplier. In the process a commodity market for wholesale electricity transactions was established.

Who develops UK energy storage projects?

Major developers of UK energy storage projects include EDF, Pivot Power, Statera, and RES, with each company active in several power supply and flexibility markets, providing services to National Grid, Distribution Network Operators (DNOs), as well as operating in the wholesale energy markets.

Can wholesale electricity prices be stored?

Unlike other markets that use a forward curve for pricing contracts for delivery at different points in time, the fact that wholesale electricity prices cannot be stored means that the traditional methods of pricing a forward contract (i.e spot price plus net carry) do not apply.

How does wholesale energy cost affect a customer's Bill?

The cost of suppliers purchasing wholesale energy is the largest component of a customer’s bill. Wholesale prices can vary significantly compared to other components of a household bill. We take wholesale prices into account when setting the level of the Price Cap every quarter. Day ahead contracts show the price evolution in the spot market.