News

Source: ReNews

 

This morning, the Department for Energy Security and Net Zero (DESNZ) confirmed it will not introduce zonal or regional electricity pricing in the UK. Instead, it has committed to retaining a single national wholesale price as part of its wider reforms to the electricity market.

This is a significant and welcome development for the renewables sector and the energy industry at large. At LSP Renewables, we see this decision as a clear step in the right direction — one that will provide much-needed stability for project planning, investor confidence, and long-term infrastructure development.

 

Since the consultation launched in 2022, the proposal to split the UK into pricing zones had raised substantial concern across the industry. Zonal pricing could have created market inefficiencies, discouraged investment in certain regions, and introduced unnecessary complexity into an already ambitious transition to net zero.

Instead, the Government’s chosen route — to reform the current system while maintaining national pricing — strikes a sensible balance between improving grid efficiency and ensuring fairness for consumers and developers alike.

 

What this means for our sector:

• Investor Confidence: Maintaining a unified pricing structure reduces uncertainty for developers and financial backers, strengthening the UK’s reputation as a reliable market for renewable energy.

• Project Viability: A clear and predictable pricing framework supports timely project development and long-term planning.

• Grid Efficiency Reforms: The announcement also highlighted key developments such as the Strategic Spatial Energy Plan (due in 2026), and a forthcoming review of Transmission Network Use of System (TNUoS) charges, which could further incentivise generation in the right locations.

 

LSP is proud to be part of a sector that advocated for a balanced and pragmatic approach. We commend RenewableUK and other key stakeholders who engaged constructively throughout the consultation, amplifying the voices of developers, investors, and communities across the country.

Looking ahead, we are committed to supporting the Government’s Reformed National Pricing Delivery Plan and NESO’s ongoing work to reduce system constraints — particularly the initiative to match wind generation in Scotland with increased local demand, minimising the need for curtailment.

 

This decision not only protects the integrity of the market but keeps the UK on track to meet its clean power targets.