UK government scraps electricity 'zonal pricing' reforms
By Benjamin Chiou
Date: Thursday 10 Jul 2025
(Sharecast News) - The UK government has canned plans for so-called 'zonal pricing' for electricity usage, preferring to stick with a single national price so that the system is fairer for consumers.
The Department for Energy Security and Net Zero confirmed on Thursday that it has chosen to reform the existing national pricing system rather than split the country into different zones.
Zonal pricing would have charged people different amounts for their electricity, depending on their proximity to where energy is generated.
For example, for areas in Scotland, where electricity generation outstrips demand by such an amount that windfarms are sometimes switched off, electricity users would pay less when compared with more heavily populated areas such as southern England.
However, following a consultation period which started in 2022, the government has decided that reforming the current system while retaining a single national wholesale price "is the right way to deliver a fair, affordable, secure, and efficient electricity system".
Under the new proposals outlined on Thursday, the energy department said it will "implement an ambitious approach to reformed national pricing, a cohesive package of reforms to improve the effectiveness of our national pricing model". This includes providing stronger signals for efficient siting of new assets and improving overall operational efficiency, it said.
"Building clean power at pace and scale is the only way to get Britain off the rollercoaster of fossil fuel markets and protect families and businesses for good," said energy secretary Ed Miliband.
"As we embark on this new era of clean electricity, a reformed system of national pricing is the best way to deliver an electricity system that is fairer, more affordable, and more secure, at less risk to vital investment in clean energy than other alternatives."
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