Ecotricity founder Dale Vince said the Government must scrap the ‘utterly mad’ system that ties the price of green energy to the international price of fossil gas
18:52, 24 May 2025Updated 18:52, 24 May 2025
Spikes in global gas prices can hit British consumers hard due to a ‘dodgy energy market mechanism'(Image: FluxFactory via Getty Images)
Ministers are under pressure to fix Britain’s broken energy market which is adding hundreds of pounds to household bills.
Eco-tycoon Dale Vince said the Government must scrap the “utterly mad” system that ties the price of green energy to the international price of fossil gas. Renewable energy is becoming cheaper to produce but the wholesale market for electricity in the UK uses a system where electricity is sold at the price of the most expensive unit – typically fossil gas.
A report by the Green Britain Foundation found in 2023 alone, this broken market mechanism added £43 billion to UK energy bills – or £367 per household If energy prices spiked again like in 2022 – even in a future powered by mostly clean electricity – it could still cost nearly £87 billion – or £741 per household.
Mr Vince, founder of Ecotricity who has donated millions to Labour, said: “Labour needs to fix Britain’s broken energy market if it wants to bring down energy bills. I’m waiting for a reply from Keir Starmer and Ed Miliband. Why won’t they break the link now and slash the nation’s energy bills?
READ MORE: Ed Miliband says ‘I’m 100% up for a fight with Nigel Farage’ over urgent issue – and Starmer is too
Dale Vince called on ministers to shake up the broken energy market(Image: PA Wire)
“We’ve got a dodgy energy market mechanism – that ties the price of all electricity to the most expensive source, which is nearly always fossil gas – dirty, mostly imported, and wildly volatile in price. Our report shows how this utterly mad system has been costing us billions.”
If the link isn’t severed, the UK will continue to be vulnerable to global market shocks such as the surge in gas prices after Russia invaded Ukraine in 2022, he said.
Mr Vince added: “By breaking this link we can slash bills and become truly energy independent, not just making the energy we need here but pricing it here too.
“We live in a world of real uncertainty – it’s absolutely crucial we don’t repeat the mistakes we made during the last energy crisis, or worse.”
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Consumer champion Martin Lewis recently supported the idea, tweeting: “We need to delink our electricity prices from the gas price urgently.”
A Department for Energy Security and Net Zero spokesperson said: “As long as Britain remains exposed to the rollercoaster of global fossil fuel markets, we will be vulnerable to energy price rises over which we have no control.
“Our clean energy mission is the route to protecting consumers and bringing down bills for good.
“We are looking at a range of options for longer term energy market reform, including the rebalancing of gas and electricity prices, with the impact on consumers at the heart of our approach. We will set out further details in due course.”
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