- Ed Miliband considering new model for energy bills
- Zonal pricing would see prices match supply and demand
- Energy companies split on idea
Energy secretary Ed Miliband is reportedly considering introducing ‘zonal pricing’ in a bid to bring down bills in high energy generating areas of the UK in what could be the biggest shake up of pricing since the 1990s.
According to reports from the BBC and elsewhere, Miliband’s scheme would see the price of energy matching supply and demand in that area.
It would mean in theory parts of the UK that produce a lot of wind, such as Scotland, or solar, such as the South West, would have lower prices than other areas.
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Greg Jackson, the CEO of Octopus Energy, the UK’s largest domestic energy supplier, was quoted by the BBC welcoming the news, saying it would make the energy system as a whole more efficient and reduce pressure on the grid.
However, there is also opposition to the plans, with some major energy industry stakeholders, including SSE and Scottish Power, reportedly concerned that such a significant change in the market could risk investment and delay projects, which in turn would cost jobs.
Dale Vince, CEO of Ecotricity, in an interview with the BBC, described the possible move to zonal pricing as a “terrible idea” that will mean “tens of millions of Britons could end up paying more for their energy than they do now”.
Miliband, also speaking to the BBC, said it was “an incredibly complex question” but insisted there needed to be reform of the energy market to get household bills down.
“There are two options, zonal pricing and reformed national pricing,” Milibans said.
“Whatever route we go down, the bottom line is bills have got to fall, and they should fall throughout the country.”
