Why Britain Kept One National Electricity Price: Zonal Pricing Explained
- Zonal pricing would have set different wholesale prices in different regions.
- The UK government rejected it on 10 July 2025 and kept a single national market.
- The reason given included complexity, investor uncertainty and about seven years to implement.
- Reformed national pricing adds planning, charging and balancing changes instead.
- For households, most of the change is indirect and slow.
Britain has one wholesale electricity price for the whole country. In July 2025 the government decided to keep it, rather than split the market into price zones, and to reform the system around it.
What zonal pricing means
Today a megawatt hour of wholesale electricity has the same price across Great Britain, even though it is harder to move power from Scotland to southern England than within one area. Zonal pricing would have split the market into regions, each with its own price. Where power is plentiful and the wires are full, prices would be lower. Where demand is high and supply short, they would be higher.
The aim was to send a signal about where to build generation, storage and demand. The cost, if you are a household, is that your own price could depend on where you live.
What the government decided
A law-firm summary of the decision in Norton Rose Fulbright's REMA update says that on 10 July 2025 the UK government rejected zonal pricing and kept a single GB-wide national market. It cited complexity, investor uncertainty, distributional challenges and an estimated seven years to implement.
This was the outcome of the Review of Electricity Market Arrangements, or REMA. The review's other options are described in the same summary, and we have not read the full government documents, so we rely on that summary for the details below.
What reformed national pricing adds
The summary lists several parts of the reformed approach. The ones most relevant to storage are:
- A Strategic Spatial Energy Plan led by NESO, to guide where and what types of generation and storage are built. The first version is due for consultation in late 2026, according to the summary.
- Reform of transmission charging, so that connection and network charges for generation, storage and demand send clearer locational signals.
- Operational changes to the Balancing Mechanism, including shortening the settlement period to 15 or 5 minutes.
- Continued support for projects through Contracts for Difference and the Capacity Market.
What it means for storage and households
For large batteries, the charging and planning changes will shape where it makes sense to connect. For home batteries, the effect is indirect. Shorter settlement periods would make price signals finer, which fits with the smart tariffs described in our smart meters and half-hourly settlement guide. A single national price also means your wholesale-linked tariff does not depend on your postcode, though network charges still do.
We could not confirm exact timings for each reform beyond what the summary states, and policy of this kind often shifts.
Common questions
What is zonal pricing?
A market design where different regions have different wholesale electricity prices, reflecting local supply and grid limits.
Did the UK adopt zonal pricing?
No. The government rejected it on 10 July 2025 and kept a single national wholesale price.
What replaced it?
Reformed national pricing: a single market with spatial planning, charging reform and operational changes.
Will this change my tariff?
Not directly. Any effect is indirect and slow, and we could not confirm specific changes to household tariffs.
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