Analysis: Energy generators’ soaring revenues highlight deep problems

Professor Michael Grubb and Dr Serguey Maximov Gajardo (both UCL Bartlett School Environment, Energy & Resources) examine the increasing revenues of British electricity generating stations and explore implications for the future in The Conversation. Twenty-nine billion pounds is a lot of money. It's how much we estimate the total annual revenue to British electricity generating stations increased as a result of last year's energy crisis - from £20.5 billion before COVID (in 2018 and 2019) to £49.5 billion in 2022. The indications are that these revenues increased by about twice as much as overall generation costs. Getting at the numbers is not easy. Britain has a competitive market for "wholesale" electricity, the bulk electricity sold by major generating companies from fossil fuel (overwhelmingly gas), nuclear and renewable energy power stations. The price is set in an auction between the electricity consumers (large industries or electricity suppliers that purchase electricity for their clients) and its generators.