Whether to keep Britain’s electricity system as one national market or break it into regions with different prices is one of the consequential decisions looming for Prime Minister Keir Starmer’s government. There are potential benefits for consumers but major downsides for green power companies. Britain needs to deliver its climate goals and the impact of redrawing the market run to tens of billions of pounds.
“Both sides think they’re doing what’s right,” said Adam Bell, head of policy at consultancy Stonehaven who was previously in charge of strategy at the UK’s energy ministry. “There are a lot of people who stand to make or lose a lot of money either way.”
Today, Britain has a single wholesale price. But an ongoing review that’s expected to conclude early next year could split the UK into different zones each with a separate price, reflecting the balance of supply and demand and how much space there is on the grid. Areas like Scotland that have the most abundant wind power resources, but little electricity demand, would have a lower power price than the southeast of England, where it’s the opposite.
Influential voices from the UK’s biggest electricity supplier Octopus Energy and the country’s grid operator want to split up the market saying it would save consumers money, deliver on a Labour Party election promise to cut bills and give the British economy a boost. It could also spur building of new generation in England where local opposition has stymied investment, as well as potentially draw businesses to invest in far-flung parts of the country in order to access some of the world’s cheapest electricity.
