Wholesale Electricity PricesThese prices are updated to reflect the wholesale power price that electricity suppliers are paying

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. Here electricity is traded in large volumes, mostly between electricity producers selling the output of their power stations and electricity suppliers buying what their customers need.  When power is traded in the UK market, it may be quoted in megawatt hours (MWh).

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UK Wholesale Power - Day Ahead PricesThis chart shows the price of electricity on the wholesale market in GB for delivery the next working day

day ahaead electricity prices 20.08.20

Last Updated 20.08.20

Day ahead power prices are available for delivery the next working day and typically reflect the true market rate as the conditions that make up the price are not influenced by long term events.

UK Wholesale Power - Season Ahead Prices - Winter 2020This chart shows the price of electricity on the wholesale market in GB for delivery the next month

season ahead electricity prices 20.08.20

Last Updated 20.08.20

Unlike other markets that use a forward curve for pricing contracts for delivery at different points in time, the fact that electricity cannot be stored means that the traditional methods of pricing a forward contract (i.e spot price plus net carry) do not apply.  As a result expected levels of supply and demand determine the forward price in £/MWh.

UK Wholesale Power - Year Ahead Prices - Win20+Sum21This chart tracks the prices of the next front season

year ahead electricity prices 20.08.20

Last Updated 20.08.20

Competition in the electricity and gas markets was phased in over an eight-year period, due to the sheer size of the task in terms of the number of customers and the technical complexities involved. In April 1990 the first tranche of the electricity market, covering about 5,000 large customers with a maximum demand of 1 MW and above, was opened to competition. Ten years later 81% of customers in this market were supplied by a non-local supplier.

UK Wholesale Electricity Prices Market

In 1991 British Gas also opened their market to competition with the first tranche affecting customers with a consumption in excess of 25,000 therms per annum.  The second tranche of the gas market was opened between 1992 and 1995, dependent on location and affected customers with a consumption of between 2,500 therms and 25,000 therms per annum. In April 1994 the second tranche of the electricity market, covering about 50,000 medium size customers with a maximum demand of 100 kW-1MW, was opened to competition. This market competition has also developed well and now more than 50% of customers are supplied by a non-local supplier.

The Last Group – Wholesale Electricity Prices

The last and the largest tranche of the commercial electricity market covering about 26 million customers with an annual consumption of up to 12,000 kWh, so-called ‘designated customers’, including domestic and small business customers, was progressively opened up for competition between September 1998 and May 1999. Slightly earlier, in May 1998 the domestic gas market, some 18 million customers, was fully opened to competition. By the start of 2001 around 11 million (38%) of domestic customers had switched supplier at least once.  Today daily energy trading takes place which determines the current, and future wholesale electricity prices on the market. All of our wholesale electricity prices graph reports and wholesale electricity prices historical can be found in our reporting section of our site along with our wholesale electricity prices Europe report and detailed analysis on wholesale electricity prices 2012 through to the present day.

Are wholesale electricity prices falling?

Wholesale electricity is a futures commodity and as such electricity can be purchased or sold at a predetermined price at a specified time in the future. Because of this reason electricity has many different time frames that it can be purchased so prices rise and fall on a daily basis depending on the time frame of purchase.