A coalition of offshore wind developers has called on the UK government to abandon proposals for zonal pricing, citing concerns that the policy could hinder Scotland's clean energy growth. The developers, representing around 33GW of Scotland's future clean power capacity, warn that the introduction of zonal pricing could create unmanageable risks and make projects unviable.
In a letter addressed to UK Prime Minister Keir Starmer and Scottish First Minister John Swinney, 17 developers, supported by industry bodies including Scottish Renewables, have urged the government to reconsider the proposal. The letter argues that zonal pricing – a system that would divide the UK into different pricing zones and result in varying electricity costs for consumers – could stall investments and lead to higher energy bills for both households and businesses.
“Zonal pricing has become a dangerous distraction which risks derailing these vital new developments for energy security,” said Claire Mack, Chief Executive of Scottish Renewables. She added, “Any theoretical benefits of zonal pricing have not been convincingly demonstrated and would take at least seven years to deliver.”
Industry analysis has indicated that even a modest increase in the costs of renewable projects could negate any potential savings from zonal pricing, further complicating the energy transition.
Mack emphasized that Scotland has become a key hub for clean energy investment and infrastructure. “To maintain and accelerate this momentum, it is imperative that these critical projects are safeguarded against the increasingly complex challenges we face in the current economic landscape.”
Scottish Renewables is advocating for a reformed National Market, a combination of measures to improve current market arrangements without implementing zonal pricing. Mack also highlighted the potential benefits of modernizing transmission charges, which could offer a “double win” for both consumers and the industry.
“We urge the UK Government to rule out zonal pricing and commit to workable reforms which ensure industry can deliver the high-value jobs, new supply chains, and affordable energy which are crucial for the future prosperity of our country,” she concluded.
