UK (Parliament Politics Magazine) – British government scraps zonal energy pricing, backing a single national rate to protect consumers and secure stable investment in clean power.
As reported by The Guardian, the UK has scrapped its “zonal pricing” plan, which could have raised electricity costs in the south, choosing a uniform national rate to ensure fairness.
What led the UK to drop its regional electricity pricing plan?
Energy Secretary Ed Miliband had been weighing a zonal pricing plan. It would have made electricity costs vary by region, based on local supply and demand.
The plan aimed to shift major electricity users to regions like Scotland. There, surplus wind energy often goes unused because of low local demand.
Senior officials warned the plan could deter investors and slow renewable energy growth.
On Thursday, the energy department said it was dropping the plan after a long review that started in 2022.
Ed Miliband’s views on the new national energy pricing system
Ed Miliband 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.”
He added,
“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. Our package of reforms will protect consumers and secure investment as we drive to deliver our clean power mission through our Plan for Change.”
Why did ministers choose to scrap zonal pricing in favour of a national plan?
Under the new plan, ministers said the government will lead energy network planning. They will decide the location of clean energy infrastructure based on long-term needs.
The decision has reignited a long-running divide among energy leaders. Supporters claim it could improve efficiency, while critics warn it may raise bills and threaten the UK’s clean energy goals.
What did industry leaders think about the end of zonal pricing?
Greg Jackson, boss of Octopus Energy, supported zonal pricing. But big renewable companies like SSE, Scottish Power, and RWE were strongly against it.
The company SSE described the announcement as “much-needed policy clarity,” reassuring both investors and energy users.
Centrica boss Chris O’Shea backed the government’s U-turn, calling it “commonsense.” He warned that the “theoretical benefits never stacked up against the real-world risks” in zonal pricing.
What would zonal pricing have meant for energy bills?
Under the scrapped plan, high-generation areas like Scotland with limited demand would have received cheaper electricity. Regions such as south-east England, where energy demand is high, were likely to see increased electricity costs under the zonal pricing plan.
Consultants were hired by both camps to produce detailed reports supporting their arguments, alongside intense lobbying to promote their positions.
UK’s energy and net-zero goals
- UK emissions declined by 50.4% in 2024 compared to 1990.
- Territorial emissions were 413.7 MtCO₂e in 2024, down 2.5% from 2023.
- Britain targets a 68% emissions cut by 2030 under the Paris deal.
- Renewables made up 42.3% of UK energy in early 2025.
- Clean energy output hit 152.6 TWh in 2024, expected to reach 290 TWh by 2033.
- UK targets 43–50 GW offshore wind by 2030; Hornsea 3 to power millions.
- A net-zero economy added £83.1bn GVA and supported 951,000 jobs in 2024.
- Each £1 from net-zero firms generated £1.89 in wider economic value.
- Yorkshire & Humber and the West Midlands are key regional net-zero hubs.