Green Energy

That is exactly what happens, each potential provider says "I will sell you Y amount of power for at least X price" the grid tots up the offers going from cheapest up until they have enough generating capacity and then pay all the providers the highest price they needed to get to. This is all public so they cant pay the cheap provider less than the expensive one, because they can just turn round and raise their price to that same highest price, knowing that the provider wold lose more money to go to everyone else.

(They actually do it the other way round, start at the highest price and keep lowering it and having providers drop out, until too many drop out and then the previous price is set for everyone that's still in. But it has the same end result, everyone gets paid the lowest price that enough people are willing to sell at in order to cover demand.)