RenewableUK Cymru has raised concerns over a proposed new scheme called zonal electricity pricing, warning that it could undermine investment in clean energy and increase electricity bills in Wales.
Under the scheme, currently being considered by the UK government, the country would be divided into different zones where consumers would pay varying rates for electricity, potentially creating what critics call a “postcode lottery” for billpayers.
Modelling carried out by LCP Delta on behalf of the trade group suggests that Wales could be split into four zones, with three of those facing higher prices due to high demand and limited generation capacity. The proposals would place south Wales in the same pricing zone as London, while much of mid and north Wales would be grouped with cities like Manchester and Leeds.
According to RenewableUK Cymru, this approach carries a “significant risk” of increasing energy costs in Wales. Abi Beck, Head of Strategic Communications for the group, cautioned that the scheme could harm both consumers and businesses in the region. “This scheme turns energy pricing into a postcode lottery, but Wales isn’t just taking a gamble—it could be being dealt a losing hand, facing higher bills, stalled investment, and an uncertain energy future,” Beck said.
Beck highlighted the potential impact on industries such as steel manufacturing, which are heavily reliant on affordable, clean energy. “Port Talbot Steelworks, a major energy consumer, is currently transitioning from fossil fuels to an electric arc furnace. It cannot simply pick up and move operations to a lower-cost region like Scotland to offset the rising electricity prices,” Beck explained.
While acknowledging that some sectors, such as data centres, may have the flexibility to relocate to lower-cost areas, Beck stressed that industries crucial to Wales’ economy do not have the same options.
RenewableUK Cymru believes that the key to securing affordable clean energy is investment in modernising the UK’s grid infrastructure. “Everyone wants lower prices and greater incentives for renewables,” Beck said. “The most effective way governments can achieve this is by investing in modernised grid infrastructure, to transfer the green energy from where it is produced to where it is needed, powering homes and businesses alike.”
The warning comes as the government continues to explore options for reforming the electricity pricing system, with some voices calling for more regional differentiation to reflect local generation and demand dynamics.
