18 Jun 2025
British households are paying some of the highest energy bills in Europe – not because of scarcity, but because of a fundamentally broken electricity market. The consequence? Rising bills, wasted renewable energy, and a flawed system.
At the heart of the problem is a market structure that no longer serves the needs of modern energy generation.
Octopus Energy recently pointed this out forcibly in an advertisement in national media. In the advert, Greg Jackson, Founder of Octopus Energy, stated: “Some of our biggest, newest wind farms are paid more to turn off than to generate.” It’s a recurring symptom of a system that fails to match energy supply with infrastructure reality.
Greg Jackson added: “We’ve built wind farms where there’s no grid – then we pay them for what they could have generated.” To make matters worse, while clean wind energy goes unused, “we then pay millions more every week, at last-minute rates, for gas power plants to fire up anyway.”
The inefficiencies don't stop there. Sometimes, even as wind farms are forcibly shut down due to grid constraints, we’re exporting power to France – from the very regions where that power is needed most. This not only drives up bills, it actively undermines the potential of cheap renewable energy.
These issues have a very familiar ring, especially to those who live in the Scottish Borders – a region that has seen one of the highest concentrations of onshore wind farms in the UK. While the visual presence of renewable infrastructure is undeniable, the benefits have not been fully realised locally. Instead, residents watch as turbines spin – or more often, don’t – while constraint payments flow to energy companies for electricity that is never generated. Despite being a net producer of green energy, the region is trapped in a national system that fails to value its contribution correctly. Local communities bear the burden of infrastructure without seeing proportional financial or energy returns.
But the good news is that this isn't some unsolvable British problem. Over half of OECD countries have already tackled similar issues, and solved them, with something called locational pricing. Instead of one-size-fits-all pricing, locational pricing reflects the real cost of delivering power in different areas. It incentivises investment where it's needed and maximises the use of renewables.
British consumers deserve a market that reflects the 21st century – not one that continues to reward inefficiency, frustrate green progress, and punish bill payers.