A coalition of trade associations and trade unions, including Scottish Renewables, has called on the UK Government to reject zonal pricing for electricity and instead adopt a reformed national market. In a letter to government ministers, the groups argue that zonal pricing would increase investment costs for renewable energy projects and negatively impact long-term energy bills.

The UK Government is considering zonal pricing, which would divide the UK into pricing zones, leading to varying electricity costs across different regions – a “postcode lottery" for energy bills. The coalition argues that this system would disincentivise renewable energy development, particularly in Scotland, hindering the government's clean power ambitions.

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Analysis suggests that even small increases in renewable energy project costs would negate any potential savings from zonal pricing. The uncertainty created by the proposal also risks higher bills for households and businesses, the industry warns.

“Zonal pricing is a dangerous proposal to radically rip up the way the UK electricity market operates which would derail the strong progress Scotland has made towards our clean power ambitions," said Claire Mack, Chief Executive of Scottish Renewables. “Any potential benefits of zonal pricing have not been convincingly demonstrated and the significant risks involved threaten the private investment needed to keep vital Scottish projects viable. Zonal pricing would also take at least seven years to implement, thereby undermining efforts to benefit consumers in the short term. Scotland's renewable energy industry stands ready to support the positive reforms at our disposal, alongside wider efforts to enable deployment, which will protect the scale of investment that must be secured in the years ahead. We urge the UK Government to urgently rule out zonal pricing to ensure investment comes to Scotland and our industry can continue delivering the good jobs, economic growth and affordable clean energy that are crucial for our future prosperity."