How much 12 UK regions will pay for energy under new 'zonal pricing' plan
Energy Secretary Ed Miliband could replace the country’s single electricity market with several market zones.
A big energy bill shake-up could mean a regional bill disparity for households. Labour Party Energy Secretary Ed Miliband could replace the country’s single electricity market with several market zones.
Mr Miliband is expected to make his recommendation to cabinet colleagues within the coming weeks before a final decision from the government on “zonal pricing” by the middle of this year.
It means different areas of the country would pay differing rates for their electricity based on supply and demand levels in the local area. And it could mean that energy users in the north of Scotland would pay some of the lowest market prices in the country.
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But market prices in the south of the country would climb under the shake-up. Ofgem’s chief executive, Jonathan Brearley, warned the industry against “lobbying on polarised positions” and urged companies to hold “an honest conversation” about the plans.
A spokesperson for the Department for Energy and Net Zero said: “In an unstable world, the only way to guarantee our energy security and protect consumers from future energy price shocks is by moving towards homegrown power.
“We are considering reforms to Britain’s electricity market arrangements, ensuring that these focus on protecting bill payers and encouraging investment. We will provide an update in due course.”
Miliband said: "Copper-bottomed nonsense. No decision has been made on this issue. This is an incredibly complex question that we are looking at about how we reform our energy market. There are two options, zonal pricing and reformed national pricing. Whatever route we go down, my bottom line is bills have got to fall, and they should fall throughout the country. I’m not about to introduce a postcode lottery."
Jane Cooper, Deputy CEO of RenewableUK, said: "It’s hard to see how the Government could succeed in delivering clean power by 2030 whilst also introducing this complex and controversial scheme.
"The reality is that introducing regional or zonal electricity pricing is likely to lead to higher energy bills for households and businesses in parts of England and Wales – especially in the south of England – as well as disrupting new investment in clean energy."