I know that in New Zealand, the wholesale price of electricity is set using a spot market, whereby every half hour, each of the electricity producers provide offers for how much electricity they can supply at each price level, and then when the actual amount of electricity is used, they producers are paid at the highest value need for all units of electricity supplied, with the lowest offers being utilised first.
The market is regulated by the Electricity Authority, which is an independent crown entity, while the transmission of electricity is managed by Transpower, which is a state owned enterprise.
In practise what this means, is that the producers will offer their renewable energy for free, and price their coal/oil at a higher rate. Some coal/oil is always needed and so this higher rate is determines how much the producers are paid for their cheaper energy supplied.
My question is, how else can and are electricity prices determined around the world?