The UK government is reportedly leaning against implementing a zonal electricity market system, though a final decision has not yet been made, Bloomberg reported on Tuesday, citing individuals familiar with the matter.
Sources told the publication that officials are “inclined not to push ahead with the proposal,” though any conclusive move would involve Prime Minister Keir Starmer. The proposal has been under review as part of the broader Review of Electricity Market Arrangements (REMA), aimed at reforming how the UK’s electricity market functions.
The Department for Energy Security and Net Zero (DESNZ) pushed back on speculation regarding the stance of Secretary of State Ed Miliband. In a statement to Bloomberg, the department said it is “categorically untrue” that Miliband prefers retaining the current national pricing system over the proposed zonal model.
A final decision is expected ahead of the upcoming Allocation Round 7 (AR7) of the Contracts for Difference scheme, the government’s flagship mechanism for supporting low-carbon electricity projects.
The potential shift to zonal pricing—where electricity prices vary by region based on supply and demand—has drawn both support and criticism from industry stakeholders, with some arguing it could improve market efficiency while others warn of increased complexity and regional disparities.
