Renewable Energy Foundation

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Electricity Prices: Fundamental Drivers and Probable Trends

The next decade is likely to be a period of intensifying difficulties in the UK electricity generation sector, with very tight capacity margins, and extreme dependence on imported gas, supplies of which will be constrained and prices high.

While this presents an opportunity to renewable generators, government policy must be revised in order to permit market action across the entire sector to ensure a diverse portfolio and broad innovation. Continued market intervention through subsidy and other mechanisms will hamper adaptation to crisis, and stunt research and development, particularly in renewables. This study was launched at the offices of Clifford Chance in London on the 22nd of May 2008, and was introduced with an overview presentation