Because of how electricity works. You have to produce exactly what you're consuming (or extremely close to) to avoid dephasing the network, not less, not too much. The carrier will have to shut down part of the network if that happen (rolling blackout) if you're not producing enough, but producing too much is as dangerous and will end up in blackout too. You actually have a lot of literature on OEMs, Capacity market, SPOT and other creation to try to simulate a free market, but it's always exploitable, and it makes money (a lot). Investing in an electricity company that do not produce any electricity is still a profitable venture.
Yeah sure so you need to pay people to generate (or in extreme cases not generate) that electricity. You are allowed to negotiate how much you pay them. Free market.
There are some issues, like for some reason the UK national grid doesn't pay different amounts for different locations, even though our grid capacity is too low to transport all the electricity we need from Scotland to England. They could fix that if they wanted.
You might say it's not an "open market", in that it has to be tightly controlled by the grid operators to ensure that it doesn't dephase. But it's still a free market. If you build a power station and undercut everyone else they will have to lower their prices, just like every other market.
> If you build a power station and undercut everyone else they will have to lower their prices, just like every other market.
It does not work like that. You're paid the price the most expensive power station running is setting. And as the most expensive power stations earn via the capacity market, what you do is keep your old gas/coal power station spot price set really high, and you'll profit anyway.
Also, electricity 'price' set for wind and solar are 0, good luck getting lower.
