UK is legally required to set the price of electricity to whichever generator has the highest cost - which is natural gas. Its called marginal cost pricing.
Do you think the Saudi's price their $10 per barrel oil at $10? The average price? Median? Or marginal?
They price at at the marginal price.
In the UK what this means is that cheap production like renewables and storage are incentivized to get built while the most expensive fossil production is shutting down.
Then at some point renewables start to become to marginal producer and prices crater. Which is already happening.
There's a plethora of producers with varying equipment, startup times, ramp times, costs and so on.
As renewable penetration expands the most expensive, or least flexible ones are called in fewer and fewer hours until they shut down. If one oil and gas producer tries to raise prices a competitor steps in and fills the demand.
Did you think there was this one monopoly oil and gas power producing able to dictate prices at will?
I don't know enough about oil & gas to tell you what is happening there, but not every market truly operates as a free market.
For example, nuclear power plants almost always have a contract with the government for a specific electricity price: if the market pays more the profits will go to the government, if the market pays less the government subsidizes production. Something similar happened with early wind power.
Oil and gas plants in Europe are very much not on CFDs. They can bid out their power using futures. But that is like any other market.
If you switched to 'people get paid what they bid' it's almost certain the market would just converge back to this anyway - but with a lot more gaming and guesswork (wind guessing the gas marginal price to try and get the highest price).
In a world where renewables are cheaper the transparency speeds the transition
I'm open to the idea that oil and gas are protected and subsidized in many different ways.
Accurate information on how much more they costs than renewables I don't see the link.
Accurate prices are good. Actions that stop the market acting on the accurate prices are bad.
The idea behind the regulation is that it's providing the maximum incentive to bring cheaper electricity to market.
If you try to mandate that high cost producers charge less, they will do what makes sense to control costs and then quit altogether once they are losing money.
Like you are not going to agree a eg 3 year supply deal with $SUPPLYCO at a significantly lower price than what you could get on the spot market for it (or what you could hedge out on futures).