The UK Government has published a decision on a reformed national package of measures to improve the efficiency of the Great Britian electricity system. Importantly zonal pricing has been shelved with the emphasis on a national pricing model. However much of the package is interim signalling with important elements of all of the three key measures still reliant on the outcomes of consultation or reviews. Given that unintended outcomes of policy change on the electricity system can have major implications for security of supply and affordability, this is perhaps not surprising but it will be frustrating for the industry and investors. The reason for publishing now is to remove enough policy risk to incentivise participation in the CFD allocation round 7 and the removal of uncertainties associated with zonal pricing may be enough to do that.


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REMA - Package Ditches Zonal Pricing
- Published:
10 Jul 2025 -
Author:
Adam Forsyth -
Pages:
3 -
The UK Government has published a decision on a reformed national package of measures to improve the efficiency of the Great Britian electricity system. Importantly zonal pricing has been shelved with the emphasis on a national pricing model. However much of the package is interim signalling with important elements of all of the three key measures still reliant on the outcomes of consultation or reviews. Given that unintended outcomes of policy change on the electricity system can have major implications for security of supply and affordability, this is perhaps not surprising but it will be frustrating for the industry and investors. The reason for publishing now is to remove enough policy risk to incentivise participation in the CFD allocation round 7 and the removal of uncertainties associated with zonal pricing may be enough to do that.