Zonal electricity pricing is back on the agenda but could a regional approach to charging for energy — based on geographical demand and supply — make for fairer bills all round? Callum Thompson, CEO of campaigning Business Energy Claims, enters the debate.
The energy sector is crying out for transparency and fairness
Zonal electricity pricing has the potential to do just that. The current uniform pricing model often conceals regional disparities in generation and demand, leading to inefficiencies and, in some cases, businesses paying more than necessary. By more accurately reflecting the true cost of electricity in different parts of the country, zonal pricing could incentivise smarter energy use, local investment and infrastructure development. Right now it is clear that there is mismatch across the UK and that is creating economic challenges for many businesses.
Zonal pricing could be a meaningful step towards levelling the playing field for businesses
This is particularly true for those firms operating in areas with abundant, low-cost renewable energy. At present, many of these businesses are unfairly penalised by national pricing structures that do not account for local advantages. With proper safeguards, a zonal system could reward efficiency and encourage more balanced economic development across regions, which aligns with our mission of driving fairness and accountability in the energy sector.
Economic stimulation could be another benefit of zonal pricing
There is growing evidence — both from academic research and international examples — that zonal pricing can lead to more efficient energy markets and regional economic stimulation. In countries where similar models are in place, we’ve seen increased investment in renewable energy and grid technologies, alongside more competitive pricing for local businesses. For the UK, this could mean that businesses in regions with high renewable output, like Scotland and parts of the North, would benefit from lower costs, potentially spurring job creation and economic growth.
A positive force for reform
We would support any legislative or regulatory change that improves transparency, reduces consumer harm and fosters fair competition. However, it is essential that any move toward zonal pricing includes strong oversight to ensure it doesn’t inadvertently disadvantage vulnerable regions or create new inequalities. As an organisation that has long campaigned against opaque practices in the energy market — such as undisclosed commissions — we see regulation as a vital tool for protecting consumers and rebuilding trust in the sector. If implemented thoughtfully, zonal pricing could be a positive force for reform.
The short term fix
Zonal electricity is still some way off and in the short term the best thing businesses can do is to scrutinise their current bills, hold their suppliers to account and fight for the fairest deals possible. That’s where Business Energy Claims can help. We know the sector inside out, understand the challenges facing businesses and can spot broker red flags from a mile off. It’s well worth giving us a call if you have any questions about hidden fees or contracts that you fear could have been mis-sold.