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Why is the spot price of electricity determined by the highest price that gets offered? Can't they scale it according to the actually offered prices?
most energy markets work using "spot markets", where everyone puts in an offer for how much electricity they can provide and at what price, and then everyone gets paid the highest price based on what's used. With the current excessively high prices of natural gas in Europe, this leads to absolutely massive electricity bills for consumers while also causing producers of very cheap electricity like nuclear and renewables to receive just as massive excess profits. What I'm wondering: why is this system used? Why can't a system be used where the price is based on the actual energy mixture, such that e.g. if out of every 100 MWh used 40 is renewables at 50 EUR each and 60 is gas at 300 EUR each, the final price for those 100 MWh is 20,000 instead of 30,000 EUR? I get that might incentivize the cheaper producers asking for higher prices and thus partially negating the intended effect, but there must be a way around that?
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