Swiss Earthquake Service and ETH Zurich aim to make geothermal energy safer


geothermal power

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Advanced Traffic Light System for Geothermal Safety models fracture growth and friction with rock physics, geophones, and supercomputers to predict induced seismicity during hydraulic stimulation, enabling real-time risk control for ETH Zurich and SED.

 

Key Points

ATLS uses rock physics, geophones, and HPC to forecast induced seismicity in real time during geothermal stimulation.

✅ Real-time seismic risk forecasts during hydraulic stimulation

✅ Uses rock physics, friction, and fracture modeling on HPC

✅ Supports ETH Zurich and SED field tests in Iceland and Bedretto

 

The Swiss Earthquake Service and ETH Zurich want to make geothermal energy safer, so news piece from Switzerland earlier this month. This is to be made possible by new software, including machine learning, and the computing power of supercomputers. The first geothermal tests have already been carried out in Iceland, and more will follow in the Bedretto laboratory.

In areas with volcanic activity, the conditions for operating geothermal plants are ideal. In Iceland, the Hellisheidi power plant makes an important contribution to sustainable energy use, alongside innovations like electricity from snow in cold regions.

Deep geothermal energy still has potential. This is the basis of the 2050 energy strategy. While the inexhaustible source of energy in volcanically active areas along fault zones of the earth’s crust can be tapped with comparatively little effort and, where viable, HVDC transmission used to move power to demand centers, access on the continents is often much more difficult and risky. Because the geology of Switzerland creates conditions that are more difficult for sustainable energy production.

Improve the water permeability of the rock

On one hand, you have to drill four to five kilometers deep to reach the correspondingly heated layers of earth in Switzerland. It is only at this depth that temperatures between 160 and 180 degrees Celsius can be reached, which is necessary for an economically usable water cycle. On the other hand, the problem of low permeability arises with rock at these depths. “We need a permeability of at least 10 millidarcy, but you can typically only find a thousandth of this value at a depth of four to five kilometers,” says Thomas Driesner, professor at the Institute of Geochemistry and Petrology at ETH Zurich.

In order to improve the permeability, water is pumped into the subsurface using the so-called “fracture”. The water acts against friction, any fracture surfaces shift against each other and tensions are released. This hydraulic stimulation expands fractures in the rock so that the water can circulate in the hot crust. The fractures in the earth’s crust originate from tectonic tensions, caused in Switzerland by the Adriatic plate, which moves northwards and presses against the Eurasian plate.

In addition to geothermal energy, the “Advanced Traffic Light System” could also be used in underground construction or in construction projects for the storage of carbon dioxide.

Quake due to water injection

The disadvantage of such hydraulic stimulations are vibrations, which are often so weak or cannot be perceived without measuring instruments. But that was not the case with the geothermal projects in St. Gallen 2013 and Basel 2016. A total of around 11,000 cubic meters of water were pumped into the borehole in Basel, causing the pressure to rise. Using statistical surveys, the magnitudes 2.4 and 2.9 defined two limit values ??for the maximum permitted magnitude of the earthquakes generated. If these are reached, the water supply is stopped.

In Basel, however, there was a series of vibrations after a loud bang, with a time delay there were stronger earthquakes, which startled the residents. In both cities, earthquakes with a magnitude greater than 3 have been recorded. Since then it has been clear that reaching threshold values ??determines the stop of the water discharge, but this does not guarantee safety during the actual drilling process.

Simulation during stimulation

The Swiss Seismological Service SED and the ETH Zurich are now pursuing a new approach that can be used to predict in real time, building on advances by electricity prediction specialists in Europe, during a hydraulic stimulation whether noticeable earthquakes are expected in the further course. This is to be made possible by the so-called “Advanced Traffic Light System” based on rock physics, a software developed by the SED, which carries out the analysis on a high-performance computer.

Geophones measure the ground vibrations around the borehole, which serve as indicators for the probability of noticeable earthquakes. The supercomputer then runs through millions of possible scenarios, similar to algorithms to prevent power blackouts during ransomware attacks, based on the number and type of fractures to be expected, the friction and tensions in the rock. Finally, you can filter out the scenario that best reflects the underground.

Further tests in the mountain

However, research is currently still lacking any real test facility for the system, because incorrect measurements must be eliminated and a certain data format adhered to before the calculations on the supercomputer. The first tests were carried out in Iceland last year, with more to follow in the Bedretto geothermal laboratory in late summer, where reliable backup power from fuel cell solutions can keep instrumentation running. An optimum can now be found between increasing the permeability of rock layers and an adequate water supply.

The new approach could make geothermal energy safer and ultimately help this energy source to become more accepted, while grid upgrades like superconducting cables improve efficiency. Research also sees areas of application wherever artificially caused earthquakes can occur, such as in underground mining or in the storage of carbon dioxide underground.

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India to Ration Coal Supplies as Electricity Demand Surges

India Coal Supply Rationing redirects shipments from high-inventory power plants to stations facing shortages as electricity demand surges, inventories fall, and outages persist; Coal India, NTPC imports, and smaller mines bolster domestic supply.

 

Key Points

A temporary policy redirecting coal from high-stock plants to shortage-hit plants amid rising demand

✅ Shipments halted 1 week to plants with >14 days coal stock

✅ Smaller mines asked to raise output; NTPC to import 270,000 tons

✅ Outages at Adani and Tata Mundra units pressure domestic supply

 

India will ration coal supplies to power plants with high inventories to direct more shipments to stations battling shortages, even as shortages ease in some regions, as surging demand outstrips production.

Supplies to plants with more than two weeks’ coal inventory will be halted for a week, a team headed by federal Coal Secretary Alok Kumar decided on Saturday, the Power Ministry said in a statement. The government has also requested smaller mines to raise output to supplement shipments from state miner Coal India Ltd., and is taking steps to get nuclear back on track to diversify the energy mix.

A jump in electricity consumption spurred by a reviving economy and an extended summer, after an earlier steep demand decline in India, is driving demand for coal, which helps produce about 70% of the nation’s electricity. The surge in demand complicates India’s clean-energy transition efforts amid solar supply headwinds that cloud near-term alternatives, and may bolster arguments favoring the country’s dependence on coal to fuel economic growth.

“There’s no doubt India will continue to need coal for stable power for years,” said Rupesh Sankhe, vice president at Elara Capital India Pvt. in Mumbai. “Plants that meet environmental standards and are able to produce power efficiently will see utilization rising, but I doubt we’re going to have many new coal plants.”  

Coal stockpiles at the country’s power plants had fallen to 14.7 million tons as of Aug. 24, tumbling 62% from a year earlier, according to the latest data from the Central Electricity Authority. More than 88 gigawatts of generation plants, about half the capacity monitored by the power ministry, had inventories of six days or less as of that date, the data show. Power demand jumped 10.5% in July from a year earlier, even as global electricity use dipped 15% during the pandemic, according to the government.
Outages at some large plants that run on imported coal have increased the burden on those that burn domestic supplies, aiding shortfalls.

Adani Power Ltd. had almost 2 gigawatts of capacity in outage at its Mundra plant in Gujarat at the start of the week, while Tata Power Co. Ltd. had shut 80% of its 4-gigawatt plant in the same town for maintenance, power ministry data show.

NTPC Ltd., the largest power generator, will import the 270,000 tons of coal it left out from contracts placed earlier to mitigate the fuel shortage, reflecting higher imported coal volumes this fiscal, the power ministry said in a separate statement.

 

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Hungary's Quiet Alliance with Russia in Europe's Energy Landscape

Hungary's Russian Energy Dependence underscores EU tensions, as TurkStream gas flows, discounted imports, and pipeline reliance challenge sanctions, energy security, diversification, and decoupling goals amid Ukraine war pressures and bloc unity concerns.

 

Key Points

It is Hungary's reliance on Russian gas and oil via TurkStream, complicating EU sanctions and energy independence.

✅ 85% gas, 60% oil imports from Russia via TurkStream pipelines.

✅ Discounted contracts seldom cut bills; security cited by Budapest.

✅ EU decoupling targets hampered; sanctions leverage and unity erode.

 

Hungary's energy policies have positioned it as a notable outlier within the European Union, particularly in the context of the ongoing geopolitical tensions stemming from Russia's invasion of Ukraine. While the EU has been actively working to reduce its dependence on Russian energy sources through an EU $300 billion plan to dump Russian energy, Hungary has maintained and even strengthened its energy ties with Moscow, raising concerns about EU unity and the effectiveness of sanctions.

Strategic Energy Dependence

Hungary's energy infrastructure is heavily reliant on Russian supplies. Approximately 85% of Hungary's natural gas and more than 60% of its oil imports originate from Russia. This dependence is facilitated through pipelines such as TurkStream, which delivers Russian gas to Hungary via Turkey and the Balkans amid Europe's energy nightmare over price volatility and security. In 2025, Hungary's gas imports through TurkStream are projected to reach 8 billion cubic meters, a significant increase from previous years. These imports are often secured at discounted rates, although such savings may not always be passed on to Hungarian consumers.

Political and Economic Considerations

Prime Minister Viktor Orbán has been a vocal critic of EU sanctions against Russia and has consistently blocked EU initiatives aimed at providing military aid to Ukraine, even as Ukraine leans on power imports to keep the lights on. His government argues that Russia's military capabilities make it an unyielding adversary and that a ceasefire would only solidify its territorial gains. Orbán's stance has led to Hungary's isolation within the EU on matters related to the conflict in Ukraine.

Economically, Hungary's reliance on Russian energy has been justified by the government as a means to maintain low energy prices for consumers and ensure energy security. However, critics argue that this strategy undermines EU efforts to achieve energy independence and reduces the bloc's leverage over Russia amid a global energy war marked by price hikes and instability.

EU's Response and Challenges

The European Union has set ambitious goals to reduce its reliance on Russian energy, aiming to halt imports of Russian natural gas by the end of 2027 and prohibit new contracts starting in 2025 while exploring gas price cap strategies to contain market volatility. However, Hungary's continued imports of Russian energy complicate these efforts. The TurkStream pipeline, in particular, has become a focal point in discussions about the EU's energy strategy, as it enables ongoing Russian gas exports to Europe despite the bloc's broader decoupling initiatives.

Hungary's actions have raised concerns among other EU member states about the effectiveness of the sanctions regime and the potential for other countries to exploit similar loopholes. There are calls for stricter policies, including banning spot gas purchases and enforcing traceability of gas origins, and consideration of emergency measures to limit electricity prices to ensure genuine energy independence and reduce overreliance on external suppliers.

Hungary's steadfast energy relationship with Russia presents a significant challenge to the European Union's collective efforts to reduce dependence on Russian energy sources. While Hungary argues that its energy strategy is in the national interest, it risks undermining EU solidarity and the bloc's broader geopolitical objectives. As the EU continues to navigate its energy transition and response to the ongoing conflict in Ukraine, including energy ceasefire violations reported by both sides, Hungary's position will remain a critical point of contention within the union.

 

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When paying $1 for a coal power plant is still paying too much

San Juan Generating Station eyed for $1 coal-plant sale, as Farmington and Acme propose CCS retrofit, meeting emissions caps and renewable mandates by selling captured CO2 for enhanced oil recovery via a nearby pipeline.

 

Key Points

A New Mexico coal plant eyed for $1 and a CCS retrofit to cut emissions and sell CO2 for enhanced oil recovery.

✅ $400M-$800M CCS retrofit; 90% CO2 capture target

✅ CO2 sales for enhanced oil recovery; 20-mile pipeline gap

✅ PNM projects shutdown savings; renewable and emissions mandates

 

One dollar. That’s how much an aging New Mexico coal plant is worth. And by some estimates, even that may be too much.

Acme Equities LLC, a New York-based holding company, is in talks to buy the 847-megawatt San Juan Generating Station for $1, after four of its five owners decided to shut it down. The fifth owner, the nearby city of Farmington, says it’s pursuing the bargain-basement deal with Acme to avoid losing about 1,600 direct and indirect jobs in the area amid a broader just transition debate for energy workers.

 

We respectfully disagree with the notion that the plant is not economical

Acme’s interest comes as others are looking to exit a coal industry that’s been plagued by costly anti-pollution regulations. Acme’s plan: Buy the plant "at a very low cost," invest in carbon capture technology that will lower emissions, and then sell the captured CO2 to oil companies, said Larry Heller, a principal at the holding group.

By doing this, Acme “believes we can generate an acceptable rate of return,” Heller said in an email.

Meanwhile, San Juan’s majority owner, PNM Resources Inc., offers a distinctly different view, echoing declining coal returns reported by other utilities. A 2022 shutdown will push ratepayers to other energy alternatives now being planned, saving them about $3 to $4 a month on average, PNM has said.

“We could not identify a solution that would make running San Juan Generating Station economical,” said Tom Fallgren, a PNM vice president, in an email.

The potential sale comes as a new clean-energy bill, supported by Governor Lujan Grisham, is working its way through the state legislature. It would require the state to get half of its power from renewable sources by 2030, and 100 percent by 2045, even as other jurisdictions explore small modular reactor strategies to meet future demand. At the same time, the legislation imposes an emissions cap that’s about 60 percent lower than San Juan’s current levels.

In response, Acme is planning to spend $400 million to $800 million to retrofit the facility with carbon capture and sequestration technology that would collect carbon dioxide before it’s released into the atmosphere, Heller said. That would put the facility into compliance with the pending legislation and, at the same time, help generate revenue for the plant.

The company estimates the system would cut emissions by as much as 90 percent, and the captured gas could be sold to oil companies, which uses it to enhance well recovery. The bottom line, according to Heller: “A winning financial formula.”

It’s a tricky formula at best. Carbon-capture technology has been controversial, even as new coal plant openings remain rare, expensive to install and unproven at scale. Additionally, to make it work at the San Juan plant, the company would need to figure out how to deliver the CO2 to customers since the nearest pipeline is about 20 miles (32 kilometers) away.

 

Reducing costs

Acme is also evaluating ways to reduce costs at San Juan, Heller said, including approaches seen at operators extending the life of coal plants under regulatory scrutiny, such as negotiating a cheaper coal-supply contract and qualifying for subsidies.

Farmington’s stake in the plant is less than 10 percent. But under terms of the partnership, the city — population 45,000 — can assume full control of San Juan should the other partners decide to pull out, mirroring policy debates over saving struggling nuclear plants in other regions. That’s given Farmington the legal authority to pursue the plant’s sale to Acme.

 

At the end of the day, nobody wants the energy

“We respectfully disagree with the notion that the plant is not economical,” Farmington Mayor Nate Duckett said by email. Ducket said he’s in better position than the other owners to assess San Juan’s importance “because we sit at Ground Zero.”

The city’s economy would benefit from keeping open both the plant and a nearby coal mine that feeds it, according to Duckett, with operations that contribute about $170 million annually to the local area.

While the loss of those jobs would be painful to some, Camilla Feibelman, a Sierra Club chapter director, is hard pressed to see a business case for keeping San Juan open, pointing to sector closures such as the Three Mile Island shutdown as evidence of shifting economics. The plant isn’t economical now, and would almost certainly be less so after investing the capital to add carbon-capture systems.

 

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California electricity pricing changes pose an existential threat to residential rooftop solar

California Rooftop Solar Rate Reforms propose shifting net metering to fixed access fees, peak-demand charges, and time-of-use pricing, aligning grid costs, distributed generation incentives, and retail rates for efficient, least-cost electricity and fair cost recovery.

 

Key Points

Policies replacing net metering with fixed fees, demand charges, and time-of-use rates to align costs and incentives.

✅ Large fixed access charge funds grid infrastructure

✅ Peak-demand pricing reflects capacity costs at system peak

✅ Time-varying rates align marginal costs and emissions

 

The California Public Service Commission has proposed revamping electricity rates for residential customers who produce electricity through their rooftop solar panels. In a recent New York Times op‐​ed, former Governor Arnold Schwarzenegger argued the changes pose an existential threat to residential rooftop solar. Interest groups favoring rooftop solar portray the current pricing system, often called net metering, in populist terms: “Net metering is the one opportunity for the little guy to get relief, and they want to put the kibosh on it.” And conventional news coverage suggests that because rooftop solar is an obvious good development and nefarious interests, incumbent utilities and their unionized employees, support the reform, well‐​meaning people should oppose it. A more thoughtful analysis would inquire about the characteristics and prices of a system that supplies electricity at least cost.

Currently, under net metering customers are billed for their net electricity use plus a minimum fixed charge each month. When their consumption exceeds their home production, they are billed for their net use from the electricity distribution system (the grid) at retail rates. When their production exceeds their consumption and the excess is supplied to the grid, residential consumers also are reimbursed at retail rates. During a billing period, if a consumer’s production equaled their consumption their electric bill would only be the monthly fixed charge.

Net metering would be fine if all the fixed costs of the electric distribution and transmission systems were included in the fixed monthly charge, but they are not. Between 66 and 77 percent of the expenses of California private utilities do not change when a customer increases or decreases consumption, but those expenses are recovered largely through charges per kWh of use rather than a large monthly fixed charge. Said differently, for every kWh that a PG&E solar household exported into the grid in 2019, it saved more than 26 cents, on average, while the utility’s costs only declined by about 8 cents or less including an estimate of the pollution costs of the system’s fossil fuel generators. The 18‐​cent difference pays for costs that don’t change with variation in a household’s consumptions, like much of the transmission and distribution system, energy efficiency programs, subsidies for low‐​income customers, and other fixed costs. Rooftop solar is so popular in California because its installation under a net metering system avoids the 18 cents, creating a solar cost shift onto non-solar customers. Rooftop solar is not the answer to all our environmental needs. It is simply a form of arbitrage around paying for the grid’s fixed costs.

What should electricity tariffs look like? This article in Regulation argues that efficient charges for electricity would consist of three components: a large fixed charge for the distribution and transmission lines, meter reading, vegetation trimming, etc.; a peak‐​demand charge related to your demand when the system’s peak demand occurs to pay for fixed capacity costs associated with peak use; and a charge for electricity use that reflects the time‐ and location‐​varying cost of additional electricity supply.

Actual utility tariffs do not reflect this ideal because of political concerns about the effects of large fixed monthly charges on low‐​income customers and the optics of explaining to customers that they must pay 50 or 60 dollars a month for access even if their use is zero. Instead, the current pricing system “taxes” electricity use to pay for fixed costs. And solar net metering is simply a way to avoid the tax. The proposed California rate reforms would explicitly impose a fixed monthly charge on rooftop solar systems that are also connected to the grid, a change that could bring major changes to your electric bill statewide, and would thus end the fixed‐​cost avoidance. Any distributional concerns that arise because of the effect of much larger fixed charges on lower‐​income customers could be managed through explicit tax deductions that are proportional to income.

The current rooftop solar subsidies in California also should end because they have perverse incentive effects on fossil fuel generators, even as the state exports its energy policies to neighbors. Solar output has increased so much in California that when it ends with every sunset, natural gas generated electricity has to increase very rapidly. But the natural gas generators whose output can be increased rapidly have more pollution and higher marginal costs than those natural gas plants (so called combined cycle plants) whose output is steadier. The rapid increase in California solar capacity has had the perverse effect of changing the composition of natural gas generators toward more costly and polluting units.

The reforms would not end the role of solar power. They would just shift production from high‐​cost rooftop to lower‐​cost centralized solar production, a transition cited in analyses of why electricity prices are soaring in California, whose average costs are comparable with electricity production in natural gas generators. And they would end the excessive subsidies to solar that have negatively altered the composition of natural gas generators.

Getting prices right does not generate citizen interest as much as the misguided notion that rooftop solar will save the world, and recent efforts to overturn income-based utility charges show how politicized the debate remains. But getting prices right would allow the decentralized choices of consumers and investors to achieve their goals at least cost.

 

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Philippines Ranks Highest in Coal-Generated Power Dependency

Philippines coal dependency underscores energy transition challenges, climate change risks, and air pollution, as rising electricity demand, fossil fuels, and emissions shape policy shifts toward renewable energy, grid reliability, and sustainable development.

 

Key Points

It is rising reliance on coal for power, driven by demand and cost, with climate, air pollution, and policy risks.

✅ Driven by rising demand, affordability, and grid reliability.

✅ Worsens emissions, air pollution, and public health burdens.

✅ Policy shifts aim at renewable energy, efficiency, and standards.

 

In a striking development, the Philippines has surpassed China and Indonesia to become the nation most dependent on coal-generated power in recent years. This shift highlights significant implications for the country's energy strategy, environmental policies, and its commitment to sustainable development, and comes as global power demand continues to surge worldwide.

Rising Dependency on Coal

The Philippines' increasing reliance on coal-generated power is driven by several factors, including rapid economic growth, rising electricity demand, and regional uncertainties in China's electricity sector that influence fuel markets, and the perceived affordability and reliability of coal as an energy source. Coal has historically been a key component of the Philippines' energy mix, providing a stable supply of electricity to support industrialization and urbanization efforts.

Environmental and Health Impacts

Despite its economic benefits, coal-generated power comes with significant environmental and health costs, especially as soaring electricity and coal use amplifies exposure to pollution. Coal combustion releases greenhouse gases such as carbon dioxide, contributing to global warming and climate change. Additionally, coal-fired power plants emit pollutants such as sulfur dioxide, nitrogen oxides, and particulate matter, which pose health risks to nearby communities and degrade air quality.

Policy and Regulatory Landscape

The Philippines' energy policies have evolved to address the challenges posed by coal dependency while promoting sustainable alternatives. The government has introduced initiatives to encourage renewable energy development, improve energy efficiency, and, alongside stricter emissions standards on coal-fired power plants, is evaluating nuclear power for inclusion in the energy mix to meet future demand. However, balancing economic growth with environmental protection remains a complex and ongoing challenge.

International and Domestic Pressures

Internationally, there is growing pressure on countries to reduce reliance on fossil fuels and transition towards cleaner energy sources as part of global climate commitments under the Paris Agreement, illustrated by the United Kingdom's plan to end coal power within its grid. The Philippines' status as the most coal-dependent nation underscores the urgency for policymakers to accelerate the shift towards renewable energy and reduce carbon emissions to mitigate climate impacts.

Challenges and Opportunities

Transitioning away from coal-generated power presents both challenges and opportunities for the Philippines. Challenges include overcoming entrenched interests in the coal industry, addressing energy security concerns, and navigating the economic implications of energy transition, particularly as clean energy investment in developing nations has recently declined, adding financial headwinds. However, embracing renewable energy offers opportunities to diversify the energy mix, reduce dependence on imported fuels, create green jobs, and improve energy access in remote areas.

Community and Stakeholder Engagement

Engaging communities and stakeholders is crucial in shaping the Philippines' energy transition strategy. Local residents, environmental advocates, industry leaders, and policymakers play essential roles in fostering dialogue, raising awareness about the benefits of renewable energy, and advocating for policies that promote sustainable development and protect public health.

Future Outlook

The Philippines' path towards reducing coal dependency and advancing renewable energy is critical to achieving long-term sustainability and resilience against climate change impacts. By investing in renewable energy infrastructure, enhancing energy efficiency measures, and fostering innovation in clean technologies, as renewables poised to eclipse coal indicate broader momentum, the country can mitigate environmental risks, improve energy security, and contribute to global efforts to combat climate change.

Conclusion

As the Philippines surpasses China and Indonesia in coal-generated power dependency, the nation faces pivotal decisions regarding its energy future. Balancing economic growth with environmental stewardship requires strategic investments in renewable energy, robust policy frameworks, and proactive engagement with stakeholders to achieve a sustainable and resilient energy system. By prioritizing clean energy solutions, the Philippines can pave the way towards a greener and more sustainable future for generations to come.

 

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Britons could save on soaring bills as ministers plan to end link between gas and electricity prices

UK Electricity-Gas Price Decoupling aims to reform wholesale electricity pricing under the Energy Security Bill, shielding households from gas price spikes, supporting renewables, and easing the cost-of-living crisis through market redesign and transparent tariffs.

 

Key Points

Policy to decouple power prices from gas via the Energy Security Bill, stabilizing bills and reflecting renewables

✅ Breaks gas-to-power pricing link to cut electricity costs

✅ Reduces volatility; shields households from global gas shocks

✅ Highlights benefits of renewables and market transparency

 

Britons could be handed relief on rocketing household bills under Government plans to sever the link between the prices of gas and electricity, including proposals to restrict energy prices in the market, it has emerged.

Ministers are set to bring forward new laws under the Energy Security Bill to overhaul the UK's energy market in the face of the current cost-of-living crisis.

They have promised to provide greater protection for Britons against global fluctuations in energy prices, through a price cap on bills among other measures.

The current worldwide crisis has been exacerbated by the Ukraine war, which has sent gas prices spiralling higher.

Under the current make-up of Britain's energy market, soaring natural gas prices have had a knock-on effect on electricity costs.

But it has now been reported the new legislation will seek to prevent future shocks in the global gas market having a similar impact on electricity prices.

Yet the overhaul might not come in time to ease high winter energy costs for households ahead of this winter.

According to The Times, Business Secretary Kwasi Kwarteng will outline proposals for reforms in the coming weeks.

These will then form part of the Energy Security Bill to be introduced in the autumn, with officials anticipating a decrease in energy bills by April.

The newspaper said the plans will end the current system under which the wholesale cost of gas effectively determines the price of electricity for households.

Although more than a quarter of Britain's electricity comes from renewable sources, under current market rules it is the most expensive megawatt needed to meet demand that determines the price for all electricity generation.

This means that soaring gas prices have driven up all electricity costs in recent months, even though only around 40% of UK electricity comes from gas power stations.

Energy experts have compared the current market to train passengers having to pay the peak-period price for every journey they make.

One Government source told The Times: 'In the past it didn’t really matter because the price of gas was reasonably stable.

'Now it seems completely crazy that the price of electricity is based on the price of gas when a large amount of our generation is from renewables.'

It was also claimed ministers hope the reforms will make the market more transparent and emphasise to consumers the benefits of decarbonisation, amid an ongoing industry debate over free electricity for consumers.

A Government spokesperson said: 'The high global gas prices and linked high electricity prices that we are currently facing have given added urgency to the need to consider electricity market reform.

 

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