Energy: Prices
The question
To ask the Secretary of State for Energy Security and Net Zero, what assessment he has made of the potential merits of introducing zonal pricing on private investment.
Answered by Michael Shanks
The Government is considering reforms to the electricity market through our Review of Electricity Market Arrangements (REMA). This includes consideration of whether to move to a zonal electricity market, where prices vary depending on local conditions, or to continue with a reformed version of our national pricing arrangements.
Zonal pricing could have significant benefits, including through reducing the cost of energy to businesses. However, it also creates potential new risks to generators that need to be carefully considered.
Any decisions on market reform will be based on a robust analysis of the costs and benefits.
The Government plans to conclude the policy development phase of the REMA programme by mid-2025.
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