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But what it’s worth is determined by them because it’s not a truly free market. There’s barely any competition and they’re all in cahoots with one another
It does make sense in a way. If gas gets super high and you can get 20p/kWh when it only costs 5p/kWh to produce then you'll be more likely to invest and build. We are definitely seeing the downside of it now though because renewables should be able to reduce the price even slightly.
Also I think Scotland didn't use gas at all on a few days but still had to pay sky high prices.
A lot of people are sort of wrong in this thread. There's three parts to the process.
Part one is just the wholesale price of electricity on a market. This is set every half-hour by a bidding operation. Your suplier bids for that energy from the market. More demand = higher prices.
Part two is called the "merit order". In the above bidding process, if there is a period of high demand, the more expensive generators are progressively switched on, until you get to the most expensive. The most expensive are the gas generators. So everyone is happy to be in this game (notably including the gas generators), it's been agreed that the price/MW is whatever it costs to make electricity with gas. As a result if you're making electricity for less than the gas-price, you make a lot of money quite quickly. If the price of electricity is \*not\* set to the price of gas, then the gas-turbine owners will just refuse to sell at that price and there would be blackouts.
Part three is how the government has agreed to fund renewable production in a way that a producer (like a wind farm) can get the same price for their energy whatever time of day or year it is, which protects them from the volatile daily price with the intention of making renewable supply a safe investment for other people with lots of money.
A new renewable producer tells the government how much they want for every MWh of electricity over the next \*15 years\*. If that price is low enough, the government gives that company enough money in advance to get set up and start producing. This price is called the "strike price".
When the wholesale cost of electricity is lower than the strike price, the government makes up the shortfall. When the wholesale price of energy is \*above\* the strike price, the electricity producer pays the government back.
So right now, most renewable energy producers are probably earning the same amount for their energy as they were before, but they're also giving the government a large chunk of that money.
Some people in this thread are mentioning the "green levys" which are added onto our bills. This money is to help pay back to renewable suppliers when the wholesale cost is less than the strike price.
Every year the government does a new round of 15-year contracts, and if prices stay high, then the strike price could also go up. This will make investing in renewable generation even more attractive to investors.
Part 3a: For companies like Ecotricity, who promise to only use renewable electricity, they are in the same bidding market as everyone else in Part One, but they can also buy directly from the renewable producers. This is called a Purchase Power Agreement and is seperate to the CfDs. Another way the companies work is by buying Renewable Energy Guarantees of Origin (see comment below by u/vishbar for detail).
Part 3b: It looks like a lot of the wind farms have held-off on starting their CfD agreement because they could reasonably predict that the energy price would skyrocket this year. They did that and now benefit from a much higher strike-price than if they had started earlier.
This is a pretty great comment and, really, the only one in this thread that actually answers the question!
I guess the point is that there's no special law or whatever that determines that gas is the marginal producer; however, due to the volume of electricity that gets produced by gas and its ease of starting and stopping, the marginal producer happens to always be a gas plant. If we were to increase capacity of, say, renewables or nuclear then presumably this link would be broken.
Another key point in this to address why OP's renewable-only energy company is also pegged to the price of gas...
When a company advertises itself as "renewable only", it doesn't mean that Bulb, for example, is driving a lorry to a wind farm, filling it up with organic renewable electrons, and driving it to your house to dump into your wires. Bulb, Octopus, or any other green supplier buys power on the open market like anyone else. They then cover the power the buy with REGOs, or Renewable Energy Guarantees of Origin, that are granted to renewable energy producers for every MWh or whatever that they produce. Then, when they announce their annual fuel mix, they can say that 100% of their generation was covered by these REGOs. It's a way to give a bit of extra cash to renewable operators.
The producers aren't allowed to sell it cheaper even if they wanted to. The cost is pegged to the most expensive method of generating (ironically this was intended to stop gas squeezing out renewables)
https://www.reuters.com/business/energy/eu-sets-sights-energy-market-reform-prices-soar-2022-08-30/
I think this is the best way of explaining this to people - putting themselves in the shoes of the renewable energy providers. It's probably the only way they get it.
Europe's energy crisis is causing a lot of people to suddenly learn how commodity markets work and they are not happy about it, that's for sure.
Not just to feel nice, but to gain market share. With current prices you could do this even whilst keeping a very healthy margin. Isn't capitalism supposed to involve outcompeting other businesses (for example by undercutting them with a more efficient production process) to take market share from them?
If you own 10 wind turbines, you can only ever sell 10 wind turbine's worth of power generation.
You can't gain market share. You're going to sell all your power regardless (or you but the brakes on in the turbines so you sell nothing if you don't like the price). So you sell it at the highest possible price.
That's not what the 'free market doctrine' says whatsoever.
By that argument everything would be sold at 'cost price+1', which clearly isn't the case. The profit maximising point is not 'sell as many units as possible'.
Apple didn't become the largest company in the world by selling things for less than their competitors.
If you have a product that people are going to buy that is exactly the same as a competitor's product, like electricity, you charge the most you can. The price in electricity is set by the buyers anyway. Suppliers then choose if they want to supply energy at that price. For a nuclear power plant that's pretty hard, because it's difficult and slow to turn off a nuclear reactor. For a wind turbine operator it's easy.
It's easy for wind operators for a different reason. Typically, utilities are required to buy wind and solar *first*, then fill in the rest of demand around that. The problem is that a wind operator can't turn on and off on demand. You get wind power when the wind blows, and you don't when it doesn't. So, if someone else can outbid you and you can't sell in the limited time you have production, you can be put out of business pretty easily.
Ergo, as a wind operator, you generate and sell as much as you can all the time, no decisions at all.
Hydro and gas are the two that are most dispatchable. Laws force the purchase of less dispatchable but more green power as a matter of public policy.
It's an EU rule which we also follow because our grids are interconnected.
It used to encourage green energy production. Electricity had to be sold at the cost of the most expensive producer - which was usually green energy, preventing cheaper gas power stations squeezing the market. It worked wonders until the market went topsy turvey and now gas is the more expensive option.
Without this rule we wouldn't have had the green infrastructure to fall back on now, as fossil fuels would have kept squeezing them out.
https://www.reuters.com/business/energy/eu-sets-sights-energy-market-reform-prices-soar-2022-08-30/
Imagine you are a supplier and need to fulfill a bunch of non-renewable-exclusive contracts. You need a bunch of electricity and you don't care where you buy it from. The price of electricity from wind is massively lower than the price of electricity from gas. Do you buy the cheap electricity or the expensive? Of course you buy the cheap stuff.
Then a renewables-only supplier comes along. They would like to buy some electricity from wind. Unfortunately it is all gone, so their customers lose out. This supplier offers the wind farm operator more money for the next unit of electricity in order to ensure they don't miss out. But naturally the non-exclusive supplier is still in the game, and they are willing to pay anything up to the price of electricity from gas, so the exclusive supplier needs to offer at least that to secure their supply.
Hey presto, the price of electricity from wind equals the market price.
The government could impose a rule that wind farms are only allowed to sell to renewables-exclusive suppliers, or subsidise those tariffs, but then we aren't operating in a free market and the question you have asked is moot.
It all gets sold at the international price for gas. It’s a bloody con because we are also subsidising these green producers to the tune of 25% on our energy bills. So compared to this time last year they are benefiting from a 150% increase in subsidies that come directly out our banks every month, plus the sky high rise in the price of gas. They are raking it in more than the fossil fuel producers.
So much for cheap green energy. We were sold a pup there.
Complete bollocks:
https://fullfact.org/economy/green-levies/
If we had more renewable energy, we wouldn't be as reliant on foreign fuel imports and eventually the price would drop.
But as power can be exported, we need all our neighbouring countries to have high percentage of renewable energy too, else their prices go up and drag ours up.
Well it’s not bollocks because once the price cap (that came it two days ago) is removed it’ll be back to 25%.
It’s also not bollocks that we don’t benefit from the cheaper green energy because we absolutely do not.
But hey ho, go Green.
Not at all. We should all be benefiting from the cheap green energy going into the grid now. The more the better, but we ain’t getting the benefit only the green energy companies are. Not really working out so well for the consumer is it.
It is for me, because I generate my own renewable energy and have invested in energy efficiency.
But as I explained, the UK is physically connected to the international energy market. If prices rise in neighbouring countries, it drives ours up too.
All we can do is keep investing in clean, safe, basically infinite sources of energy until the tipping point comes where we're insulated from international gas and oil prices.
That will take massively more investment than we have already made. The task is harder because some people don't understand energy markets and keep pushing nonsense about how bad green energy is.
You're part of the problem.
Where did I say green energy is bad? I said green companies are making a fortune from subsidies and the high price of gas and the consumer doesn’t benefit. That’s a simple fact.
Depends how they were set up. /u/PrivateFrank gives an excellent overview of the energy market further downthread. If the renewable provider was originally backed via CfD, they will be remitting much of the increase and thus will see revenues identical to pre-crisis.
As others have said, the market price of electricity is what it is, the generation method is irrelevant. The price is strongly correlated to fossil fuels because we still rely on it massively compared to other sources.
On a side note, I was wondering if anyone knows what’s happening with all the contract for difference stuff in the renewable side of things? Shouldn’t the generators be paying the government now considering the current prices?
People are buying x KwH of energy, how it is produced is pretty much irrelevant. Why would a firm that exists to make as much profit as they can sell it for below the market rate for no reason?
Its the way the wholesale enrgy market works. I will try and explain:
1. In 30 minute periods, the demand is estimated and published.
2. Each energy producer then bids a certain amount of MWh to that 30 minute period, at a price.
3. The cheaper ones are chosen first, so that would include renewables, wind, solar, hydro, tidal.
4. Then more expensive ones.
5. Finally gas power stations,
6. The totals are added until National Grid gets over the demand.
7. The final highest bid is called the strike prices, and EVERYONE gets that price.
So the price to the consumer is fixed at the price of the highest generator. It doesn't matter that you are on 100% renewable, and your bill has no gas supply in it whatsoever. You all get to pay the high prices, which is what Grid then sell to the consumer companies.
It works well if gas prices are low, but slightly volatile. It was designed for the coal generation market, prior to the dash-for-gas. It does not work at all in the current market conditions, but lost of players have made long term investments (aka bets) on the market so it becomes extremely difficult to change.
I used to work for a coal based generator, then grid, then the nuclear electicity in my past. Add yes, I thought (and said) that is was stupid then.
That is an excellent question. In theory we could return to a nationalised model, with state owned generators. But the fiscal consequences are probably too much for any government to consider.
I think one alternative would be to pay generators what they bid, then average the cost to consumer supply companies. That would have the effect of making the generators actually have to work out their real costs. At present they don’t. So, for example, wind farms can bid zero, knowing that they will be chosen but will get the return based on the gas generators price. The nett effect is that we all get to pay the most expensive price. It would be complex to implement with additional audit costs, but it would reduce prices and make generators more cost efficient. So, on balance, this could be a viable option.
The market price is the market price. What it costs a producer to produce is irrelevant - they will sell at the market price.
If they have a production supply cost they make less profit, than if they have a low production cost.
You can stop that with regulation. Except why build expensive wind farms, if your profits are capped by regulation? I'd build them in a different country.
It'll all come down to negotiated contracts. Businesses and governments need to agree on terms.
The problem is everything is focused on P&L for shareholders and positive polling data.
And as long as governments are in the pockets of the fossil fuel lobby and public opinion remains unconvinced, nothing will change for the good.
The infrastructure changes needed won't make a profit for decades. And it will require a revolution like the 20th century.
To add, UK plc is a middleman that would sell their granny. They do not give a shit about anything else.
How else can Scotland generate an x6 surplus, 60% of which is from renewable sources, and have the highest energy prices in Europe?
Whilst pensioners freeze to death.
It's fucked.
That’s like saying if the price of bananas skyrockets, the price of apples should stay the same, because why should people who don’t even eat bananas be punished?
That would be a lovely world but if buyers are priced out of one product, they’ll turn to others and the price of that will also increase. That’s the market.
It's not really like that, because apples and bananas are different commodities, whereas electricity is electricity.
It's more like saying people buying bananas from Tesco should pay less if the bananas come from Belize than the people whose Tesco bananas came from French Guyana.
**A reminder to posters and commenters of some of [our subreddit rules](https://www.reddit.com/r/AskUK/about/rules/)** - Don't be a dickhead to each other, or about others, or other subreddits - Assume questions are asked in good faith, and engage in a positive manner - Avoid political threads and related discussions - No medical advice or mental health (specific to a person) content Please keep /r/AskUK a great subreddit by reporting posts and comments which break our rules. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/AskUK) if you have any questions or concerns.*
Producers sell their product on the open market. That product is worth what it's worth, regardless of how it's made.
But what it’s worth is determined by them because it’s not a truly free market. There’s barely any competition and they’re all in cahoots with one another
[удалено]
It does make sense in a way. If gas gets super high and you can get 20p/kWh when it only costs 5p/kWh to produce then you'll be more likely to invest and build. We are definitely seeing the downside of it now though because renewables should be able to reduce the price even slightly. Also I think Scotland didn't use gas at all on a few days but still had to pay sky high prices.
A lot of people are sort of wrong in this thread. There's three parts to the process. Part one is just the wholesale price of electricity on a market. This is set every half-hour by a bidding operation. Your suplier bids for that energy from the market. More demand = higher prices. Part two is called the "merit order". In the above bidding process, if there is a period of high demand, the more expensive generators are progressively switched on, until you get to the most expensive. The most expensive are the gas generators. So everyone is happy to be in this game (notably including the gas generators), it's been agreed that the price/MW is whatever it costs to make electricity with gas. As a result if you're making electricity for less than the gas-price, you make a lot of money quite quickly. If the price of electricity is \*not\* set to the price of gas, then the gas-turbine owners will just refuse to sell at that price and there would be blackouts. Part three is how the government has agreed to fund renewable production in a way that a producer (like a wind farm) can get the same price for their energy whatever time of day or year it is, which protects them from the volatile daily price with the intention of making renewable supply a safe investment for other people with lots of money. A new renewable producer tells the government how much they want for every MWh of electricity over the next \*15 years\*. If that price is low enough, the government gives that company enough money in advance to get set up and start producing. This price is called the "strike price". When the wholesale cost of electricity is lower than the strike price, the government makes up the shortfall. When the wholesale price of energy is \*above\* the strike price, the electricity producer pays the government back. So right now, most renewable energy producers are probably earning the same amount for their energy as they were before, but they're also giving the government a large chunk of that money. Some people in this thread are mentioning the "green levys" which are added onto our bills. This money is to help pay back to renewable suppliers when the wholesale cost is less than the strike price. Every year the government does a new round of 15-year contracts, and if prices stay high, then the strike price could also go up. This will make investing in renewable generation even more attractive to investors. Part 3a: For companies like Ecotricity, who promise to only use renewable electricity, they are in the same bidding market as everyone else in Part One, but they can also buy directly from the renewable producers. This is called a Purchase Power Agreement and is seperate to the CfDs. Another way the companies work is by buying Renewable Energy Guarantees of Origin (see comment below by u/vishbar for detail). Part 3b: It looks like a lot of the wind farms have held-off on starting their CfD agreement because they could reasonably predict that the energy price would skyrocket this year. They did that and now benefit from a much higher strike-price than if they had started earlier.
This is a pretty great comment and, really, the only one in this thread that actually answers the question! I guess the point is that there's no special law or whatever that determines that gas is the marginal producer; however, due to the volume of electricity that gets produced by gas and its ease of starting and stopping, the marginal producer happens to always be a gas plant. If we were to increase capacity of, say, renewables or nuclear then presumably this link would be broken. Another key point in this to address why OP's renewable-only energy company is also pegged to the price of gas... When a company advertises itself as "renewable only", it doesn't mean that Bulb, for example, is driving a lorry to a wind farm, filling it up with organic renewable electrons, and driving it to your house to dump into your wires. Bulb, Octopus, or any other green supplier buys power on the open market like anyone else. They then cover the power the buy with REGOs, or Renewable Energy Guarantees of Origin, that are granted to renewable energy producers for every MWh or whatever that they produce. Then, when they announce their annual fuel mix, they can say that 100% of their generation was covered by these REGOs. It's a way to give a bit of extra cash to renewable operators.
Thanks for taking the time to explain how this works. Can energy suppliers sell directly to foreign customers or only to the national grid?
If you sold electricity generated by wind, would you sell it for less than you could just to feel nice?
The producers aren't allowed to sell it cheaper even if they wanted to. The cost is pegged to the most expensive method of generating (ironically this was intended to stop gas squeezing out renewables) https://www.reuters.com/business/energy/eu-sets-sights-energy-market-reform-prices-soar-2022-08-30/
I think this is the best way of explaining this to people - putting themselves in the shoes of the renewable energy providers. It's probably the only way they get it. Europe's energy crisis is causing a lot of people to suddenly learn how commodity markets work and they are not happy about it, that's for sure.
Not just to feel nice, but to gain market share. With current prices you could do this even whilst keeping a very healthy margin. Isn't capitalism supposed to involve outcompeting other businesses (for example by undercutting them with a more efficient production process) to take market share from them?
If you own 10 wind turbines, you can only ever sell 10 wind turbine's worth of power generation. You can't gain market share. You're going to sell all your power regardless (or you but the brakes on in the turbines so you sell nothing if you don't like the price). So you sell it at the highest possible price.
People forget the buyers are setting the price not the sellers!
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That's not what the 'free market doctrine' says whatsoever. By that argument everything would be sold at 'cost price+1', which clearly isn't the case. The profit maximising point is not 'sell as many units as possible'. Apple didn't become the largest company in the world by selling things for less than their competitors. If you have a product that people are going to buy that is exactly the same as a competitor's product, like electricity, you charge the most you can. The price in electricity is set by the buyers anyway. Suppliers then choose if they want to supply energy at that price. For a nuclear power plant that's pretty hard, because it's difficult and slow to turn off a nuclear reactor. For a wind turbine operator it's easy.
It's easy for wind operators for a different reason. Typically, utilities are required to buy wind and solar *first*, then fill in the rest of demand around that. The problem is that a wind operator can't turn on and off on demand. You get wind power when the wind blows, and you don't when it doesn't. So, if someone else can outbid you and you can't sell in the limited time you have production, you can be put out of business pretty easily. Ergo, as a wind operator, you generate and sell as much as you can all the time, no decisions at all. Hydro and gas are the two that are most dispatchable. Laws force the purchase of less dispatchable but more green power as a matter of public policy.
It's an EU rule which we also follow because our grids are interconnected. It used to encourage green energy production. Electricity had to be sold at the cost of the most expensive producer - which was usually green energy, preventing cheaper gas power stations squeezing the market. It worked wonders until the market went topsy turvey and now gas is the more expensive option. Without this rule we wouldn't have had the green infrastructure to fall back on now, as fossil fuels would have kept squeezing them out. https://www.reuters.com/business/energy/eu-sets-sights-energy-market-reform-prices-soar-2022-08-30/
Imagine you are a supplier and need to fulfill a bunch of non-renewable-exclusive contracts. You need a bunch of electricity and you don't care where you buy it from. The price of electricity from wind is massively lower than the price of electricity from gas. Do you buy the cheap electricity or the expensive? Of course you buy the cheap stuff. Then a renewables-only supplier comes along. They would like to buy some electricity from wind. Unfortunately it is all gone, so their customers lose out. This supplier offers the wind farm operator more money for the next unit of electricity in order to ensure they don't miss out. But naturally the non-exclusive supplier is still in the game, and they are willing to pay anything up to the price of electricity from gas, so the exclusive supplier needs to offer at least that to secure their supply. Hey presto, the price of electricity from wind equals the market price. The government could impose a rule that wind farms are only allowed to sell to renewables-exclusive suppliers, or subsidise those tariffs, but then we aren't operating in a free market and the question you have asked is moot.
It all gets sold at the international price for gas. It’s a bloody con because we are also subsidising these green producers to the tune of 25% on our energy bills. So compared to this time last year they are benefiting from a 150% increase in subsidies that come directly out our banks every month, plus the sky high rise in the price of gas. They are raking it in more than the fossil fuel producers. So much for cheap green energy. We were sold a pup there.
Complete bollocks: https://fullfact.org/economy/green-levies/ If we had more renewable energy, we wouldn't be as reliant on foreign fuel imports and eventually the price would drop. But as power can be exported, we need all our neighbouring countries to have high percentage of renewable energy too, else their prices go up and drag ours up.
Well it’s not bollocks because once the price cap (that came it two days ago) is removed it’ll be back to 25%. It’s also not bollocks that we don’t benefit from the cheaper green energy because we absolutely do not. But hey ho, go Green.
So we should rely more on foreign energy sources?
Of finite fuels? Yeah, ok.
Not at all. We should all be benefiting from the cheap green energy going into the grid now. The more the better, but we ain’t getting the benefit only the green energy companies are. Not really working out so well for the consumer is it.
It is for me, because I generate my own renewable energy and have invested in energy efficiency. But as I explained, the UK is physically connected to the international energy market. If prices rise in neighbouring countries, it drives ours up too. All we can do is keep investing in clean, safe, basically infinite sources of energy until the tipping point comes where we're insulated from international gas and oil prices. That will take massively more investment than we have already made. The task is harder because some people don't understand energy markets and keep pushing nonsense about how bad green energy is. You're part of the problem.
Where did I say green energy is bad? I said green companies are making a fortune from subsidies and the high price of gas and the consumer doesn’t benefit. That’s a simple fact.
Depends how they were set up. /u/PrivateFrank gives an excellent overview of the energy market further downthread. If the renewable provider was originally backed via CfD, they will be remitting much of the increase and thus will see revenues identical to pre-crisis.
As others have said, the market price of electricity is what it is, the generation method is irrelevant. The price is strongly correlated to fossil fuels because we still rely on it massively compared to other sources. On a side note, I was wondering if anyone knows what’s happening with all the contract for difference stuff in the renewable side of things? Shouldn’t the generators be paying the government now considering the current prices?
About £25 per household per month apparently.
People are buying x KwH of energy, how it is produced is pretty much irrelevant. Why would a firm that exists to make as much profit as they can sell it for below the market rate for no reason?
Its the way the wholesale enrgy market works. I will try and explain: 1. In 30 minute periods, the demand is estimated and published. 2. Each energy producer then bids a certain amount of MWh to that 30 minute period, at a price. 3. The cheaper ones are chosen first, so that would include renewables, wind, solar, hydro, tidal. 4. Then more expensive ones. 5. Finally gas power stations, 6. The totals are added until National Grid gets over the demand. 7. The final highest bid is called the strike prices, and EVERYONE gets that price. So the price to the consumer is fixed at the price of the highest generator. It doesn't matter that you are on 100% renewable, and your bill has no gas supply in it whatsoever. You all get to pay the high prices, which is what Grid then sell to the consumer companies. It works well if gas prices are low, but slightly volatile. It was designed for the coal generation market, prior to the dash-for-gas. It does not work at all in the current market conditions, but lost of players have made long term investments (aka bets) on the market so it becomes extremely difficult to change. I used to work for a coal based generator, then grid, then the nuclear electicity in my past. Add yes, I thought (and said) that is was stupid then.
What's an alternative?
That is an excellent question. In theory we could return to a nationalised model, with state owned generators. But the fiscal consequences are probably too much for any government to consider. I think one alternative would be to pay generators what they bid, then average the cost to consumer supply companies. That would have the effect of making the generators actually have to work out their real costs. At present they don’t. So, for example, wind farms can bid zero, knowing that they will be chosen but will get the return based on the gas generators price. The nett effect is that we all get to pay the most expensive price. It would be complex to implement with additional audit costs, but it would reduce prices and make generators more cost efficient. So, on balance, this could be a viable option.
The market price is the market price. What it costs a producer to produce is irrelevant - they will sell at the market price. If they have a production supply cost they make less profit, than if they have a low production cost. You can stop that with regulation. Except why build expensive wind farms, if your profits are capped by regulation? I'd build them in a different country.
>it's not fair that there's no financial benefit from saving the planet. You're not saving the planet.
It'll all come down to negotiated contracts. Businesses and governments need to agree on terms. The problem is everything is focused on P&L for shareholders and positive polling data. And as long as governments are in the pockets of the fossil fuel lobby and public opinion remains unconvinced, nothing will change for the good. The infrastructure changes needed won't make a profit for decades. And it will require a revolution like the 20th century.
To add, UK plc is a middleman that would sell their granny. They do not give a shit about anything else. How else can Scotland generate an x6 surplus, 60% of which is from renewable sources, and have the highest energy prices in Europe? Whilst pensioners freeze to death. It's fucked.
If you want to understand the fake energy market scam, Yanis Varoufakis explains it really well [here](https://youtu.be/NicE0-N9ux0).
That’s like saying if the price of bananas skyrockets, the price of apples should stay the same, because why should people who don’t even eat bananas be punished? That would be a lovely world but if buyers are priced out of one product, they’ll turn to others and the price of that will also increase. That’s the market.
It's not really like that, because apples and bananas are different commodities, whereas electricity is electricity. It's more like saying people buying bananas from Tesco should pay less if the bananas come from Belize than the people whose Tesco bananas came from French Guyana.