EMA explains electricity tariff-fuel price link

NARAYANA Narayana asked about the relationship between electricity tariff and fuel prices ("Oil prices, electricity tariffs don't tally": BT, Oct 3).

The electricity tariff consists of two main components - the fuel cost component and the non-fuel cost component. The latter includes capital and operating costs of generation companies and grid charges, while the former refers to the cost of natural gas which is the…