Britain Rejects Zonal Pricing. Reformed National Pricing Now Has to Do the Work Zones Would Have Done
On 10 July 2025 the UK government published its summer update to the Review of Electricity Market Arrangements, the programme launched in 2022 to decide how Britain's power market should work in a decarbonised system. The headline decision was clear. Great Britain will retain a single national wholesale electricity market and will not introduce zonal pricing. Instead the government will pursue what it calls reformed national pricing: a package built around a Strategic Spatial Energy Plan, reform of transmission network charges and connection charges, changes to balancing and settlement, and measures to manage grid constraints.
Supporters of zonal pricing, including some economists and parts of the National Energy System Operator's earlier analysis, argued that splitting Britain into several price zones would send stronger signals about where generation and demand should locate, reduce the cost of grid constraints and lower bills overall. Britain's best wind resources are in Scotland and offshore in the north, while much of its demand is in England, particularly the south. Transmission capacity between the two has not kept pace with new generation.
The REMA document describes this as a misalignment between where energy is generated and the availability of transmission to get it to consumers. It distinguishes between structural constraints, which will always exist, and transitional constraints caused by the historic failure to build network capacity alongside generation. The centrepiece is the Strategic Spatial Energy Plan, being developed by the National Energy System Operator for publication in late 2026. On operations, the government lists measures to lower the threshold for participation in the Balancing Mechanism, align the trading deadline with gate closure, require physical notifications to match traded positions and examine unit-level bidding and shorter settlement periods.
Zonal pricing would have sent a locational signal every half-hour, to every generator and every flexible user, automatically. Rejecting zonal pricing was a reasonable decision for a government that has made 2030 clean power its central energy objective and needs investment certainty now. Ground News, which aggregates ratings from AllSides, Ad Fontes Media and Media Bias/Fact Check, classes the outlets covering this story as 22% left-leaning, 39% centre and 39% right-leaning (4 sources, 7 sources and 7 sources respectively, excluding outlets without a bias rating).