Miliband: Zonal energy pricing 'unfair' to midlands, south of England and Wales

Highland News & Media

Secretary of State for Energy Security and Net Zero  Ed Miliband rules out zonal pricing which would cut prices in Scotland because it would be unfair to areas that consume the energy -  the midlands, south of England and Wales.

Transcript

00:00On the basis of these tests, I have concluded that the right approach is reformed national pricing, and I want to set out to the House why.

00:05First, the fairness test. Under reformed national pricing, there would be one national wholesale price, as now.

00:12And as I have said, under zonal pricing, there will be different wholesale prices in different zones,

00:18with lower prices tending to occur in zones with more renewable energy and a smaller population,

00:23and higher prices in those with less power and more people.

00:26Now, obviously, this will be a significant departure from the current system,

00:30which, while it has some differences in network costs, means wherever you live, you pay the same wholesale price for each unit of electricity.

00:38The challenge will be obvious to the House.

00:40People and businesses could find themselves disadvantaged through no fault of their own, and many would see it as unfair.

00:46Such a so-called postcode lottery is, in my view, difficult to defend.

00:50Now, the government has considered whether it would be possible to mitigate these effects under zonal pricing,

00:55and we've concluded that, while it might, it would be a very complex and uncertain process,

01:00and it would be even more challenging to do so for large businesses, given the way they purchase electricity.

01:06So, firms in higher-priced zones, such as the Midlands, Wales and South of England,

01:10would therefore face damage to their competitiveness.

01:12People in higher-priced zones, depending on what they're around-priced zones,

01:14they're nearly wy9 50p s.

01:23And they do rural Moderna of Creation in higher-priced zones.

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