The idea behind it is that everyone who supplies energy gets paid the same
E.g. it would be unfair to pay wind farms 10p/kWh and gas turbines 20p/kWh when the electricity they supply is the same and fungible
If there was enough grid storage this wouldn't be an issue, but because there isn't, there are always times where we need gas turbines to top up and those turbines won't turn on for less than it costs them, which is a lot
The upside of this is renewables are very profitable and incentivised
E.g. it would be unfair to pay wind farms 10p/kWh and gas turbines 20p/kWh when the electricity they supply is the same and fungible
If there was enough grid storage this wouldn't be an issue, but because there isn't, there are always times where we need gas turbines to top up and those turbines won't turn on for less than it costs them, which is a lot
The upside of this is renewables are very profitable and incentivised