Zonal pricing risks derailing Scotland’s clean power progress, offshore wind industry insists
A coalition of offshore wind developers, representing around 33GW of Scotland’s future clean power capacity, has urged the UK Government to immediately rule out zonal pricing and adopt workable reforms to benefit consumers and protect investment.
In a letter to Keir Starmer MP, Prime Minister of the United Kingdom, and John Swinney MSP, First Minister of Scotland, 17 offshore wind developers in Scotland, with the support of leading industry trade bodies including Scottish Renewables, have warned investment could be halted and projects left unviable by the “unmanageable risk” of zonal pricing proposals.
The UK Government is currently considering a proposal known as zonal pricing, which would divide the UK into different pricing zones and see consumers face varying electricity costs.
However, industry has warned this could lead to higher energy bills for both households and businesses. Analysis has found that even a modest increase in the costs of building renewable projects would negate any potential savings from zonal pricing.
Scottish Renewables is urging the UK Government to introduce a Reformed National Market, a combination of measures to improve existing market arrangements.
Claire Mack, Chief Executive of Scottish Renewables, said:
“As we ramp up the delivery of clean power projects across Scotland, zonal pricing has become a dangerous distraction which risks derailing these vital new developments for energy security. Any theoretical benefits of zonal pricing have not been convincingly demonstrated and would take at least seven years to deliver.
"Scotland has become a key hub for investment in clean energy infrastructure, driving the move towards a sustainable and future-proof electricity system. However, to maintain and accelerate this momentum, it is imperative that these critical projects are safeguarded against the increasingly complex challenges we face in the current economic landscape.
“The renewable energy industry stands ready to support positive reforms which will offer a double win for consumers and industry, such as modernising unfair transmission charges. These are reforms which require considerable focus from government to deliver but will improve rather than impair industry.
“We urge the UK Government to rule out zonal pricing and commit to workable reforms which ensure industry can deliver the high-value jobs, new supply chains and affordable energy which are crucial for the future prosperity of our country.”
Ends
Notes to editors
- Letter to the Prime Minister and First Minister - Review of Electricity Market Arrangements (REMA).
- Last month a group of 16 trade associations and trade unions also urged the UK Government to scrap zonal pricing proposals, a call which was supported by 55 organisations from across the business community.
- Free to use images of Claire Mack available via this link.