Peak prices
| Month | Lowest | Average | Highest |
|---|
Lowest and highest values are daily averages, not individual half-hour extremes. Source: indicative wholesale series reconstructed from public Agile tariff data. It is not the official EPEX historical archive.
Explaining the Results
This analysis uses 2025 wholesale electricity market data and applies a fixed 2p/kWh supplier margin to reflect the cost of purchasing electricity, forecasting demand, customer service, billing and a reasonable commercial return.
To understand the true cost of electricity generation, we have deliberately removed all other charges from the unit price. These include electricity network costs, environmental and social policy costs, capacity mechanisms, and other levies that are currently embedded within the retail unit rate. Under our proposal, these costs are funded either through the transparent monthly Network Access Charge or, where they represent national infrastructure or government policy, through general taxation.
The results demonstrate that wholesale electricity costs in 2025 remained well below the proposed 15p/kWh retail price for the overwhelming majority of the year. Only January, during a period of exceptionally high wholesale prices, and February, where prices were only marginally above the 15p threshold, exceeded the proposed tariff. For every other month there was significant headroom between the wholesale-based cost and the proposed retail price.
This headroom is intentional. It provides suppliers with a stable pricing framework while ensuring consumers benefit from the low cost of renewable electricity for most of the year.
Periods of unusually high wholesale prices are precisely why the Electricity Resilience Fund exists. Rather than increasing prices for every household throughout the year, the fund provides a financial buffer that can absorb temporary spikes in wholesale costs. It is financed by revenue generated from Tier 2 and Tier 3 electricity consumption, ensuring that occasional market volatility is managed without permanently increasing the standard unit price for everyone.
Our wider analysis also indicates that the proposed £25 per month Network Access Charge is sufficient to replace today’s standing charges while also covering the network-related costs that are currently hidden within the unit price. By separating these costs, consumers can clearly see what they are paying for, creating a more transparent and understandable electricity market.
Off-peak prices
| Month | Off-peak cost | Daytime cost | Off-peak margin | Daytime margin |
|---|
Off-peak is 23:30–05:30 local UK time. The two prices form one integrated tariff: daytime headroom can support the discounted overnight rate. The resilience fund covers exceptional periods when monthly headroom is insufficient.
Is the 7.5p Off-Peak Rate Sustainable?
The chart compares wholesale electricity prices during the proposed 23:30 to 05:30 off-peak period with prices during the rest of the day.
As with our main wholesale-price analysis, we have added a fixed 2p/kWh supplier margin to cover purchasing, forecasting, billing, customer service and a reasonable commercial return. Network costs and government policy costs have been removed because these would instead be funded through the Network Access Charge or general taxation.
The data shows that electricity was consistently cheaper overnight than during the daytime. However, after adding the 2p supplier margin, the average wholesale-based off-peak cost during 2025 was approximately 8.83p/kWh. This is slightly higher than the proposed 7.5p off-peak retail rate.
This does not mean that the tariff is unsustainable.
The 7.5p off-peak rate and the 15p daytime rate form one integrated electricity tariff. They are not intended to operate as two completely separate products. The daytime rate creates significantly more headroom than is required to cover daytime wholesale costs, and part of this surplus can support the discounted overnight rate.
Across 2025, the average daytime wholesale-based cost, including the supplier margin, was approximately 10.48p/kWh. Electricity sold at 15p therefore generated average headroom of approximately 4.52p/kWh.
By comparison, electricity sold at the 7.5p off-peak rate required an average cross-subsidy of approximately 1.33p/kWh.
Our analysis indicates that, across the full year, as much as approximately 77% of household electricity consumption could theoretically take place during the off-peak period before the combined tariff ceased to cover its underlying wholesale and supplier costs. In practice, household overnight consumption is expected to remain far below this level.
The lower overnight rate also creates wider system benefits. It encourages electric vehicles, home batteries, heat pumps, storage heaters and other flexible appliances to operate when national electricity demand is lower and the network has greater spare capacity.
This reduces pressure during peak periods, makes better use of existing generation and network infrastructure, and may reduce the amount of expensive grid reinforcement required in the future.
January 2025 was the principal exception. Exceptionally high wholesale prices meant that neither the daytime nor overnight rate produced sufficient monthly headroom to fully absorb the market spike.
This is precisely why the policy includes an Electricity Resilience Fund. Revenue collected from Tier 2 and Tier 3 electricity consumption would build a reserve during normal and lower-cost periods. That reserve would then protect the standard tariff during exceptional winter price events, rather than requiring prices to rise for every household throughout the year.
The objective is therefore not for every individual unit of electricity to produce the same margin. The objective is for the tariff to remain financially sustainable across the whole year while encouraging consumers to use electricity at times that reduce costs for the entire electricity system.