Regen has sent a letter to the Secretary of State to highlight concerns, shared by many experts and investors, that converting the GB electricity market into one based on zonal pricing will undermine the clean power mission. After years of engaging extensively in REMA, the benefits case for converting the GB electricity market to zonal pricing remains uncertain and the implementation and investment risks are high.
The Clean Power 2030 plan marks a significant change for the energy sector, and we warmly welcome the commitment to accelerate clean power in the UK. To drive this vital mission forward, the government will soon have to make a decision on reforming electricity markets.
However, many experts and investors share the view converting the GB electricity market into one based on zonal pricing could undermine the clean power mission. After years of engaging extensively in REMA, Regen has reached its conclusions that embarking on a long complex reform process for uncertain benefits can only hinder the £40 billion a year investment needed, and divert vital time and resources. The implementation risks are high, and a ‘postcode lottery’ of volatile zonal price differences could damage public support for net zero.
That’s why we have written to the government setting out these concerns in an open letter to the Secretary of State, providing details of the implementation and investment risks. The letter makes the case for a progressive reform agenda to achieve a dynamic, highly agile, and near real-time national market that benefits consumers and complements Clean Power 2030, as set out in our REMA insight paper.