RenewableUK has hit out at government plans to introduce zonal electricity pricing warning the move would drive up bills in parts of England and Wales—hitting consumers in the south hardest—while scaring off investment in clean energy.
The scheme would divide the UK into different pricing zones meaning households and businesses in some areas would pay far more for the same electricity than others.
Industry experts warn this postcode lottery could see the highest price spikes on the south coast, with wholesale costs soaring.
“This is a reckless idea that risks pushing up bills for millions while creating complete uncertainty for renewable investment” said RenewableUK. “The government should urgently carry out a cost-benefit analysis before even considering such a dramatic shift in electricity pricing.”
Wholesale prices make up 40-50% of electricity bills, meaning any changes would have huge consequences for households and businesses.
But these costs don’t account for network upgrades and maintenance, making the full financial impact of zonal pricing unknown.
Ofgem has signalled it is keen on the idea which is vociferously supported by Octopus Energy boss Greg Jackson.
Critics argue that far from improving the energy system zonal pricing would damage investor confidence in renewables just as the UK races to hit net zero.
Jane Cooper, Deputy CEO of RenewableUK, said:
“It’s hard to see how the Government could succeed in delivering clean power by 2030 whilst also introducing this complex and controversial scheme.
The reality is that introducing regional or zonal electricity pricing is likely to lead to higher energy bills for households and businesses in parts of England and Wales – especially in the south of England – as well as disrupting new investment in clean energy.
It would create on a postcode lottery on bills, which understandably worries communities and businesses which might see higher charges.”
A coalition of trade associations energy-intensive users and unions have signed a letter to Energy Secretary Ed Miliband and Business and Trade Secretary Jonathan Reynolds demanding an immediate review of the risks.
With consumer groups industry and unions lining up in opposition pressure is mounting on ministers to scrap the idea before it does, what RenewableUK sees as lasting damage to the UK’s clean energy future.
Copyright © 2025 Energy Live News LtdELN