In The Law of Averages I took a look at how pretty much everywhere in the world is reported at some time or another to be heating faster than the average (which is a clever trick). This time I want to take a look at how averages play out when it comes to wholesale pricing of UK electricity.

In the context of electricity, I first encountered how the use of averages can be misleading in relation to heat pumps. I wrote about it in A Heated Debate. In essence, my point was that it’s common to find it being said that heat pumps are 3-4 more times efficient than gas boilers (with a gas boiler co-efficient of performance – or COP – of around 0.9 compared to a heat pump’s average COP, often said to be 3-4). The problem with the reference to the average is that it distracts from the reality that heat pumps are most efficient in the shoulder seasons of spring and autumn and least efficient in winter when the need is greatest. Given that in the UK electricity prices tend to be around 4 times higher than gas boilers, a heat pump COP 4 times higher than the COP of a gas boiler might make it a marginal decision as to which is the better choice for any particular individual (leaving aside the usually significantly higher costs of installation). However, the fact that demand for energy is highest when the heat pump’s COP is lowest, clearly shifts the economic case away from heat pumps and gas boilers. The Wiessman website makes this perfectly clear:

Your heat pump may not work as efficiently when the outdoor temperature falls to below -5 ℃. When the temperature outside is around 7 ℃, the average heat pump should have a CoP of around 4.5, however this figure can drop to 2.3 when the temperature outside decreases to -7 ℃. This shows how much the cold weather can affect the efficiency of the appliance.

In other words, while average numbers can have their uses, they can also be extremely misleading when it comes to seeing the bigger picture.

From time to time I take a look at excellent websites such as iamkate to keep an eye on average electricity prices in the UK, as well as to see how the UK’s electricity is being generated. Even in summer, electricity generation is all over the place. Sometimes (in the middle of the day, in summer, if it’s sunny and windy) renewables can be generating a significant proportion of our electricity, with gas generation and reliance on imports via the interconnectors sinking to virtually nothing. On rare occasions, I even notice the UK being a net exporter of electricity. Usually, however, we are a significant net importer (as I write, on a windy evening – with wind generating 24.1% – we are still importing a net 4.3%, and gas is generating 46.9%. The following – even windier – morning sees the UK still relying on gas for 28.7% of its electricity and on imports for a net 9.7%). Sometimes we are heavily reliant on gas, sometimes we aren’t. It has to ramp up and down inversely to the way the vagaries of renewables ramp up and down. It occurs to me that managing the national grid must be an extremely challenging and onerous task.

That, however, is a digression. The main curiosity I have noticed is with regard to wholesale electricity prices, which regularly seem to be higher than £100 per MWh, but which are often lower than that and on rare occasions are even negative. This results in an average price which bears no relation to the highs and lows, other than being what it says it is – an average: much lower than the highs and much higher than the lows and the occasionally negative prices.

We all know that UK electricity prices are amongst the highest in the industrialised world. Renewables enthusiasts argue that renewables are cheap and that allowing gas to set the price is the problem. I struggle with that for lots of reasons. First, I have seen the price being negative, even when gas is still being used to generate electricity. Secondly, although correlation is not causation, as Jit has demonstrated globally it is the case that the more renewables there are on a system, the higher are the prices. Thirdly, as I have shown the claim that renewables are cheap stands up only if you add significant made-up carbon costs onto gas and if you ignore the whole-system costs that are specifically and solely attributable to renewables.

How does all this play out in the context of average prices? Purely by chance, as I write, iamkate tells me that the current price of electricity in the UK is £122.94 per MWh; over the past day it has averaged £109.28 per MWh; over the past week it has averaged £84.25 per MWh; over the last year it has averaged £81.41 per MWh; and over “all time” (which seems to be since the website started monitoring the price in 2012) it has averaged £69.30 per MWh. At face value those figures might suggest a concerning upward trend (as we add more renewables to the system). And concerns in that regard might not be misplaced. However, it’s the impact of averages that I want to explore.

Happily, there is a website that allows us to interrogate the prices on a half-hourly basis. We can also use it to explore the figures in many other different ways. Strangely, perhaps, this tells us that the third lowest average weekly price so far this year was week 1, when the average price was £73.90 per MWh (the lowest and second lowest were weeks 8 and 9 – late February, going into early March – at £71,59 and £72.12 respectively). Weeks 19-22 inclusive, however (weeks when renewables – solar, certainly – should be doing well) all saw average weekly prices over £100 per MWh. The last week for which figures are available (week 25) shows an average price of £104.44 per MWh.

It’s also possible to explore price trends by day, and even to explore the half-hourly prices. Taking the last week as an example, we see the following (prices are highest, lowest, and average, per MWh):

11th June 2026: £128.99; £90.56; £107.74.

12th June 2026: £112.69; £26.13; £77.76.

13th June 2026: £102.46; £-29.99; £26.00.

14th June 2026: £123.16; £40.21; £79.80.

15th June 2026: £140.00; £86.09; £106.50.

16th June 2026: £141.01; £86.03; £108.77.

17th June 2026: £141.00; £73.61; £104.79.

With the partial exception of 13th June, I find those numbers to be alarming. When domestic demand should be low (during a week close to the summer solstice) and when “cheap” renewables (espcially solar) should be performing extremely well, prices are relentlessly high.

But it gets worse, and this is the problem with averages. If we look at each of those dates in turn, we find that the times of greatest domestic demand (breakfast time and evenings) are also the times of highest prices, and the times of lowest domestic and possibly lowest overall demand are often the times that see the lowest prices. Taking those same seven days, I set out below the times when the highest and lowest prices were set:

11th June 2026: 7-7.30pm; 3.30-4pm.

12th June 2026: 7.30-8am; 3-3.30pm.

13th June 2026: 9-9.30pm; 12.30-2pm.

14th June 2026: 10-10.30pm; 3.30-4am.

15th June 2026: 8-8.30pm; 4-4.30am.

16th June 2026: 7.30-8.30pm; 1-1.30pm.

17th June 2026: 8.30-9pm; 2.30-3pm.

Defenders of the system might argue that I am simply stating the obvious – it’s a basic law of economics that as demand increases so does the price, and as demand falls, again, so does the price. However, markets usually respond to increasing demand by increasing supply, with the result that the market (and hence the price) returns to equilibrium.

This is not the case with the UK electricity generating market, where renewables enjoy favoured status on the Grid, and guaranteed (generally) high long-term prices under Contracts for Difference. Worse still, renewable energy cannot respond to increasing demand. It supplies what it supplies, and that’s that (unless the generators are paid to constrain supply because they’re generating more than the Grid can cope with). Solar, especially, is a massive failure in terms of meeting our requirements at times of peak demand. Both over the year as a whole and in respect of peaks of daily demand, solar is hopeless, and can only be of much use (beyond small-scale domestic) if and when large-scale and cheap battery storage is in place. It provides very little electricity in winter, and it provides little or nothing (depending on the time of year) at the times of daily peaks – breakfast time and in the evening.

Thus, at the very times when the law of supply and demand puts pressure on prices, the UK electricity generation system is unable to respond, other than by asking gas to ramp up and by taking electricity from the European mainland via the interconnectors. This inevitably has the result of raising prices at times of peak demand by more than would be the case in a “normal” market.

Just as EV mandates seem designed to cause maximum harm to UK car manufacturers, the way the UK electricity generation system operates seems designed to maximise costs to the consumer. And the problem with relying on average figures is that they obscure the worst aspects of the system. They hide the fact that the time when we use most electricity is the very time when we pay the highest prices for it. Claims of low prices, on the rare occasions when renewables are working hard for us, are meaningless if those times coincide – as they often seem to do – with low demand. It’s the worst of all possible worlds, and reliance on average prices handily obscures that fact for those who have sent us down this road and who want us to accelerate the journey.

29 Comments

  1. Perhaps someone with access to reams of data and a little spare time could calculate an average by first multiplying the half-hourly price by the volume delivered, and then dividing by the total delivered over the day. That might give a more representative number.

    It’s also worth noting that a large chunk of our bills is immune from such swings. When consumers are offered negative prices, something is wrong because they should still be paying for the large chunk of the bill that is not the wholesale cost.

    On batteries: the rash of batteries would not be occurring if their proprietors didn’t think there were going to be severe pinch points around tea time, pushing prices up, and making it worth their while to sell into the grid. [To the extent that it would repay their immense capex over a presumed limited lifespan.]

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  2. Jit,

    Thank you – that was effectively what I was trying to get at! Averages work only if they take into account the number of MWh that are consumed at each of the varying 30-minute price slots through every day of every week of the year. If it’s a simple adding up of the 48 daily prices then dividing them by 48, without weighting according to consumption in each 30 minutes, then the final figure will be misleading – potentially very misleading.

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  3. Something is sadly wrong with the UK energy system. It’s a warm, sunny, breezy day, Solstice Eve in fact, so this should be about as good as it gets, with the sun as high in the sky as it can be, approaching noon.

    The price is £108.83 per MWh, solar and wind between them are producing 51.7%, and we rely on the interconnectors for a net 23.7%.

    Energy security? Cheap energy?

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  4. Hi Mark, thanks for another illuminating post on ‘Averages’.

    Your para beginning “In the context of electricity, I first encountered how the use of averages can be misleading in relation to heat pumps….” misses a beat! 😀

    You correctly point out that the Viessmann (with a V and 2x Ns 😀) website highlights the fact that in Britain, heat pumps work longest and hardest at their lowest COP,

    That para includes “Given that in the UK electricity prices tend to be around 4 times higher than gas …”. That too is another average.

    Natural gas is cheap(er) 24/7, irrespective of the season, day, time of day, or weather. Electricity, on the other hand, suffers intra-day pricing and in winter heat pumps (broadly speaking) draw most power most of the time when electricity intra-day prices are highest.

    Consequently, more accurate would be “…. the fact that demand for energy is highest when the heat pump’s COP is lowest and electricity prices are highest, clearly shifts the economic case even further away from heat pumps towards gas boilers.”

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  5. Joe P,

    An excellent point. Thank you for making it. I’m embarrassed to have been caught out by the averaging fallacy.

    It’s worse than we thought!

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  6. Mid-late afternoon on Solstice Eve, there’s little sign of the system working in a way that benefits bill-payers.

    The price is £97.14 per MWh, wind & solar are generating 51%, and we’re dependent on the interconnectors for a net 22.4%.

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  7. On “The Law of Averages – And the implications for UK electricity prices”, a factoid springs to mind:

    Octopus Energy (a Greg Jackson enrichment vehicle) has sold electricity at an average price of 49.5p/kWh. 😀

    It has “Free Electricity Sessions” (as in ‘Free’ school meals) 0p/kWh, and, during peak wholesale price periods in the energy crisis (around 2022–2023) it charged for electricity to domestic UK consumers at or very close to 99p/kWh on certain dynamic tariffs. (Likely it’s ‘Agile’)

    (0 + 99)/2 =49.5p/kWh

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  8. It’s now £148.73 per MWh, with gas providing 55.7% compared to a combined 13.9% from wind and solar, and a net 5% from the interconnectors.

    For some reason we are sending 4.6% to Denmark, but as is so often the case, we are getting 14.1% from France.

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  9. Mark, I confess to being completely befuddled by the workings of the power market, especially the interconnectors. Double-shuffles like the Fr-UK-Den that you mention seem to happen quite often.

    Maybe there is insufficient capacity on other transfer lines from France to Denmark – seems unlikely? Or is it that we have a surplus of power which can be exported via the link to Denmark but cannot be sent to the south, due to capacity constraints, driving imports from France?

    Does anyone know of a clear, concise explanation of how it all works?

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  10. Summer solstice in the UK. A sunny and breezy day. Perfect for renewables. In fact, as good as it gets.

    Yet here we are mid-late afternoon, with the price at £89.60 per MWh. Gas is providing 14%, solar 40% and wind just 7.4%. meanwhile, the interconnectors are supplying a net 25.1%.

    Wind should be supplying more, but presumably the Grid can’t cope. Out and about today, our local wind farms were standing still, and not because there was no wind. I assume they were paid to turn off.

    What a shambles.

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  11. MikeH at 8.36am. That’s a very good question, but I’m afraid I don’t know the answer. I hope one of our visiting engineers may be able to help.

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  12. And now renewables combined are providing less than gas, and the price is £100.62 per MWh.

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  13. It’s day in day out, a feature not a glitch. Approaching noon on the day after summer solstice, warm, sunny and breezy, with wind and solar combined producing 54.6% of the UK’s electricity, the price is £84.03 per MWh. We are dependent on gas for a net 14%, and on the interconnectors for a net 19.7%.

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  14. It’s late morning, two days after the solstice, a sunny day, with a heatwave in some parts of the country, yet gas and the interconnectors are supplying more of the UK’s electricity than are wind and solar combined. The price is £90.15 per MWh. I assume it will be over £100 when domestic demand is higher later.

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  15. “Europe’s heatwave drives electricity prices to new highs as demand soars

    Great Britain has paid at least six times the normal price for imported power as millions turn on air conditioning and windfarm output sags”

    https://www.theguardian.com/business/2026/jun/23/electricity-prices-jump-in-europe-as-demands-soars-in-the-heatwave

    The heatwave has prompted a sharp rise in electricity prices across European markets as millions turn to air conditioners and electric fans to battle record high temperatures, which have also caused a string of power plant outages across the continent.

    Great Britain imported electricity from Europe at more than six times the normal price on Tuesday as the high-pressure heat dome has slowed wind speeds, hitting renewable energy generation, and led to outages at multiple gas plants across the country.

    The heatwave has caused windfarms on the continent to slow, and led to lower output at some nuclear plants in France, where high riverwater temperatures are making it more difficult to cool the reactors.

    The combination of rising electricity demand and falling generation across Europe has caused market prices to climb to multi-year highs.

    Great Britain’s energy system operator has resorted to paying about £470 per megawatt-hour to secure electricity imports from the continent between 5pm and 7pm on Tuesday to help meet the country’s peak electricity demand.

    These prices are more than six times the electricity market price in June last year, which averaged about £71 per megawatt-hour, and more than three times the market price of £123 on Monday. [my emphasis].

    In Germany, Europe’s biggest electricity market, power market prices were forecast to reach highs of more than €545/MWh on Tuesday evening, the highest since June 2024, according to the Epex Spot exchange.

    In France, which is bracing for temperatures of up to 43C (109F) this week, the power market price has climbed to over €268/MWh, the highest since August 2023….

    …Solar farms typically generate less power in very high temperatures, as rising panel heat reduces efficiency. But the clear skies across most of the UK helped to compensate for this loss, keeping solar output steady at about 14GW or 35% of the UK’s total generation.

    Meanwhile, wind power output fell due to the high pressure weather system, which has slowed wind speeds and is expected to set a new record for June temperatures in the UK. Wind power made up between 13% and 15% of the UK’s electricity on Tuesday, compared with an average of about 30% in June last year.

    “Wind speeds are lower too, so the energy system operator has secured around 1.5 gigawatts of extra electricity to help meet the evening peak. This is likely to come from the continent, which is having its own problems due to the heatwave,” Malhotra said.

    Households are also expected to play a role in helping the UK energy system to cope with the heatwave, by cutting their energy use to save about 115 megawatts of electricity during peak hours through a scheme that pays users to cut their demand….

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  17. From that article –

    “Shivam Malhotra, head of power trading at the consultancy LCP Delta, said it was “not unusual” to see a string of unplanned outages at British gas plants, which “tend to really struggle in extreme temperatures”.

    Five gas plants reported that they would need to reduce their output due to “ambient” conditions, cutting about 2.5 gigawatts from the UK’s gas fleet or enough electricity to power 2.5m UK homes. The loss of capacity is about 40% higher than before the heatwave, according to Malhotra.“

    Can anyone explain why that happens to me ?

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  18. I can’t explain that, and it sits uneasily with the fact that late yesterday evening the UK was reliant on gas to the tune of c 65% for electricity, we were (for once) net exporters of electricity to the continent, and the price was well over £200 per MWh.

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  19. dfh, One explanation might be that those plants are struggling with cooling. When temps are high the water feed to cooling towers is warmer than normal, reducing efficiency. Secondly, the plants may have to restrict their intake – if from rivers – to avoid the river being overheated by the returned water.

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  20. “The Compression Error

    Professor Jan Rosenow argues that electrification shrinks Europe’s energy problem. The shrinkage is real on paper — and fails because it comes entirely from leaving the hard part out of the sum.”

    https://richardlyon.substack.com/p/the-compression-error

    A superb article, well worth reading in its own right, but this is the paragraph that stands out for current purposes:

    …This is why the averages matter. No power system is sized by its annual mean; it is sized by its worst hour. ‘Three-quarters non-fossil across the year’ tells you how the system behaves when it is working. It tells you nothing about the windless fortnight when electrified heat, electrified transport and electrified industry all pull at once and the turbines stand still. That hour has to be covered, in full, by something. Efficiency does not cover it. Compression does not cover it. Only firm capacity covers it, and firm capacity is the thing the argument is built to look past….

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  21. Checking out iamkate, it appears that the price peaked at over £550 per MWh late yesterday evening.

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  22. “Solar Panels Overheat as Gas Power Stations Ordered to Fire Up”

    https://dailysceptic.org/2026/06/24/solar-panels-overheat-as-gas-power-stations-ordered-to-fire-up/

    …Gas plants have been urged to ramp up output to deal with high levels of demand expected on Wednesday night as homes and offices turn up the air conditioning to endure the heatwave.The notice comes as soaring temperatures make Britain’s solar farms less efficient, putting further strain on the power grid. Solar panel efficiency typically drops by 0.3% to 0.5% for every degree that a panel’s temperature rises above 25°C.Noemie Baud, from energy consultancy Montel, said: “Higher demand for air conditioning and cooling systems is contributing to the increase [in power demand], while lower outputs from solar and gas generation means more conventional generation is required to meet demand, pushing up prices.”Data from the UK’s grid network showed gas generation jumped from around eight gigawatts at 12pm on Tuesday, to more than 17 gigawatts overnight.More than half of Britain’s power needs were being supplied by gas on Wednesday morning, with wind generating around 12% and solar less than 10%….

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  23. Gas is currently providing a smidgeon more electricity than wind and solar combined, and the prices is a whisker below £100 per MWh.

    Going well, isn’t it?

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  25. “What’s Powering Your Hospital Today?

    Introducing Grid Margin — a live, public gauge of how reliable Britain’s electricity really is”

    https://richardlyon.substack.com/p/whats-powering-your-hospital

    Another excellent piece of work by Richard Lyon, introducing (a sister website to Subsidy CLock):

    https://gridmargin.co.uk/

    Well worth a look. However, for current purposes, this caught my eye:

    …This was a regional weather event: the same blocking heat and slack wind sat over most of north-west Europe at once. So when Britain went looking for power, what the neighbours had to spare was not wind or solar. They were short of those too. It was the fossil generation the whole continent is supposed to be leaving behind. We didn’t import clean power in a crisis. We bought expensive coal and gas, at a crisis price….

    …And NESO did it again two days later, with a second notice for the Friday evening: two summer margin notices in a single heatwave week, from an operator that had issued none in summer before. So hold on to the question of why any of this was necessary. Not a freezing January peak with the country switching on every kettle and heater at once. A warm June evening, demand well below the winter high. The margin thinned anyway, because solar fell away into the evening, wind was low, and conventional plant availability was tighter than expected, all at the same time. Those notices arrived not because demand was extraordinary, but because supply quietly wasn’t there…

    …The official account of Britain’s electricity is a good-news story, and a familiar one. The grid is getting greener every year. Renewable power is cheap. Coal is gone, wind is up, emissions are down. Ministers say it, the regulator says it, the industry says it.

    What the story leaves out is reliability. At any given moment, some of Britain’s electricity comes from firm, dispatchable plant: the gas, nuclear and biomass you can call on whatever the weather is doing. The rest relies on wind, solar and imported power across the interconnectors: sources that are cheap when they are there, and that have an awkward habit of fading away together. A cold, still, high-pressure spell does not settle over Kent and spare Calais. It becalms the whole of north-west Europe at once, which is precisely when the neighbours you were planning to import from are short themselves….

    …The official account of Britain’s electricity is a good-news story, and a familiar one. The grid is getting greener every year. Renewable power is cheap. Coal is gone, wind is up, emissions are down. Ministers say it, the regulator says it, the industry says it.

    What the story leaves out is reliability. At any given moment, some of Britain’s electricity comes from firm, dispatchable plant: the gas, nuclear and biomass you can call on whatever the weather is doing. The rest relies on wind, solar and imported power across the interconnectors: sources that are cheap when they are there, and that have an awkward habit of fading away together. A cold, still, high-pressure spell does not settle over Kent and spare Calais. It becalms the whole of north-west Europe at once, which is precisely when the neighbours you were planning to import from are short themselves.

    The public conversation rarely does the same sum. It talks about what the renewable fleet can produce on a good day, and quietly assumes the good day. Grid Margin is a citizen’s version of the operator’s margin: the de-rated, weather-aware view, kept in plain sight instead of buried in a balancing-mechanism spreadsheet.

    The 24 June notice is what that view looks like when it briefly goes amber. Not a catastrophe; the system worked exactly as designed. But it was a small, honest signal that the margin is thinner and more weather-dependent than the headline story admits. These notices are worth counting and watching as a trend, not treating as alarms. A single one proves nothing; the pattern of them, over years, tells you something. When one is in force, Grid Margin puts it where you can’t miss it: a banner across the top of the page, lit only while a scarcity notice is actually live.

    And the imports are not just an emergency measure. On the settled record, the interconnectors have supplied around an eighth of Britain’s electricity so far this year, a structural reliance, not a one-off. Most of the time they are cheap and convenient, which is exactly why we rely on them. The lesson of 24 June is what they cost, and what actually fuels them, in the precise moments the system is tight…..

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  26. Earlier today, a windy day, I noticed that our local wind farm’s turbines were stationary, every last one of them. It occurred to me that the owners had been told to turn off, and were probably in receipt of constraints payments in return for complying. I checked the iamkate website, which pretty much confirmed my idea, inasmuch as the price was close to £-20 per MWh, wind and solar were producing around 80% of our electricity, and for once we were exporting electricity via the interconnectors (were we paying them to take it off our hands?).

    Yet here we are, a few hours later, and the price is £140.86 per MWh and gas is supplying 45% of our electricity (much more than all renewable sources combined).

    Some might argue that this demonstrates the system works. After all, aren’t the lights still on?

    I would argue that we have devised a fiendishly complex, difficult and inefficient system that is increasingly expensive and problematic. In short, it’s barking mad.

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  27. We had the same with the turbines you can see from Stirling at Braes of Doune. They are turning virtually every windy day so it looks rather strange when they are all totally still.

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  28. Gas is currently supplying 61.1% of the UK’s electricity, while solar and wind combined are supplying 16.8%. the price is £163.47 per MWh.

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  29. It’s very windy, so prices are negative. For once, we are exporting electricity through the interconnectors. Are we paying them to take it off our hands?

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