Zonal pricing might be the future – but the UK’s not ready for it.
That’s the message from Cornwall Insight, which has fired a warning shot ahead of the Government’s expected decision on electricity market reform this summer.
In its latest report, Revolution Takes Time, the consultancy says that even under the most ambitious timelines, splitting Great Britain into different pricing zones won’t be feasible until the end of the decade – and more likely not until the mid-2030s.
The move would represent the biggest shake-up of the electricity market in a generation, replacing the current national pricing model with regional zones, each reflecting the true cost of delivering power locally.
In theory, it would send stronger signals to investors and encourage more efficient generation and grid use. But in practice, the path to get there is long, complex and politically fraught.
Kate Mulvany, Principal Consultant at Cornwall Insight, summed up the reality:
Zonal pricing would represent the most fundamental redesign of the GB electricity market in decades. It is an incredibly divisive topic in the industry, and regardless of the purported benefits, its implementation is going to take significant time and resource.
“Political backing and industry support may help, but a go-live before 2030 remains incredibly unlikely. The Government’s commitment to a decision by mid-2025 is welcome. But we must be realistic: this is the start of a long road, not the finish line.”
Cornwall Insight outlines a minimum five to six-year journey post-decision, involving detailed consultation, code changes, legislation, regulatory overhaul and transitional support.
Some developers argue zonal pricing would kill investment in regions with weaker grid infrastructure.
Others say it’s essential for making the system smarter and greener. Government will need to balance consumer fairness with the urgent need to unlock clean energy investment at scale.
Cornwall Insight’s indicative timeline forecasts:
- 2025: Government decision
- 2025–2029: Design and consultation
- 2027–2030: Legislative and regulatory reform
- 2030–2031: Transition period
- Post-2031: Potential full implementation
Crucially, delays or confusion over how zonal pricing interacts with support schemes like CfDs could rattle investor confidence just when the UK needs it most.
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