RenewableUK, along with several other trade groups, has issued a warning to the UK government about the potential risks of introducing electricity zonal pricing, arguing that the scheme could raise energy costs for consumers and deter much-needed investment in clean energy projects.
The proposal under consideration would divide the UK into different zones, with consumers paying varying electricity rates depending on their location. Critics argue this could lead to a “postcode lottery” for billpayers, particularly affecting households and businesses in England and Wales.
In a letter to Energy Secretary Ed Miliband and Business and Trade Secretary Jonathan Reynolds, the groups voiced concerns over the impact on both energy bills and investment. Signatories include energy-intensive users, trade unions, and various industry associations.
Jane Cooper, Deputy CEO of RenewableUK, said: “The reality is that introducing regional or zonal electricity pricing is likely to lead to higher bills for households and businesses in parts of England and Wales, as well as disrupting new investment in clean energy.”
She added, “It’s hard to see how the Government could succeed in delivering clean power by 2030 whilst also introducing this complex and controversial scheme.”
Cooper highlighted that the uncertainty surrounding zonal pricing would be reflected in the bids from developers for clean energy projects, potentially raising the cost of new infrastructure and delaying progress. “The risks created by zonal pricing would drive up the cost of building vital new projects, potentially stalling development. This would be particularly acute over the next few years, at the very time when we need to secure billions of pounds of investment and maximise the amount of new clean energy capacity we secure to strengthen the UK’s energy security,” she said.
The government has yet to comment on the concerns raised in the letter.
