Overview

• Ed Miliband has stated that the government will not implement zonal pricing if it leads to higher electricity bills in any region of the UK.
• Zonal pricing would divide the UK into regions with electricity costs determined by local supply and demand, potentially lowering bills in wind-rich areas like Scotland but raising them in the South.
• Supporters, including Octopus Energy, argue the plan could save £3.7 billion annually by reducing grid upgrade costs and ending wind farm constraint payments.
• Critics, including SSE and Scottish Power, warn the system could create regional disparities, deter renewable energy investment, and complicate the market.
• The government is conducting interdepartmental reviews of the proposal, with a final decision expected by mid-2025, as Ofgem calls for balanced industry dialogue.