Why are UK electricity bills so expensive?

I meant more subtle market/price manipulation.

They aren't rinsing profits.

Out of the £1700 average annual bill, supplier profits are £43...this is significantly higher than has been the case normally because of the volatility in energy prices. This return is also controlled by the regulator.

For scale, the cost of government subsidies is £183.

Predictably the first thing the incoming government did was: announce massive new subsidies, and create a state-owned energy company.

Network costs have also gone up because of the well-known problems with performing work on any kind of infrastructure in the UK.

The politics are part of the reason why costs are so high. We constantly rotate through insane policies that relate to the fever dreams of a lawyer. The reason why prices are high is because we have policies in place to increase prices. Companies are not making big profits (again, their returns are controlled by the regulators). Look at share prices, collapsing in the sector (unless they are getting government money).

It isn't bizarre.

The UK has many policies in place that are designed to limit output. These policies are not only not unpopular, they are wildly popular and are basically impossible to change.

Housing is one, infrastructure is another. Like people say we aren't choosing to poor...HS2 is the most expensive rail project ever per mile, double the cost of the outrageously expensive one in California. Why? Because our system gives unlimited power to lawyers, consultants...we were building bat tunnels (literally tunnels for bats) that cost £100m.

And it isn't limited to this. Look at the last Budget: we are in the middle of fiscal collapse. Tens of billions for green energy projects that add to the cost of bills, huge pay rises for the public sector (where productivity is at the same level as 1997), on and on.

How can you not think this stuff is intentional? There is no reason for almost everything we are doing, it makes absolutely no sense but we are being driven off the cliff by politicians, civil servants, lawyers, media/PR, consultants who control this country...to rephrase that: you are saying that there was no reason 11th century Britain couldn't become very rich when it was funnelling all the money to monasteries that were producing nothing but fat monks? The intention of the system isn't to make Britain rich, it is make people inside the system rich...which it is doing (again, HS2 cost £1bn for a railway that didn't get built...where do you think that money goes? there is no railway but there were tens of thousands of consultants...).

Zonal also has issues with congestion, lack of locational price signals, and something called inc/dec gaming. A Nodal design (like in many US wholesale markets) fixes this, but some of the key policy makers are reluctant to go in that direction as it would be a ~7 year project and would introduce revenue uncertainty in the meantime when they are trying to decarbonize and need to make it easy for developers to get financing. Both pro/against arguments for nodal pricing have merit. There have been many discussions on this in government.

Marginal cost based pricing is extremely unintuitive to those outside of the field, but nearly all economists support it. The reason is that this eliminates a lot of the gaming in pay-as-bid designs and helps incentivize investment in more efficient/cheaper generation, while driving out less efficient clunkers that may not be profitable anymore. The reality is of course far more complicated. These markets have saved untold amounts of money by optimizing over large regions, but you can also point out "missing money" problems where there simply isn't enough investment in generators with access to firm fuel (as opposed to when we just had monopoly utilities). As a result, much of the US has an "at risk" or "very high risk" of not having enough generation during summer/winter peak.

They also identify outages and let you do automatic efficiency stuff — you can enroll in a plan where your car charges during off-peak periods, for example.