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One idea being considered is � a system that would replace Britain’s wholesale national energy pricing with seven regional zones. This idea is complex, risky, deeply flawed and a distraction from the real solution to lowering energy bills.

Here’s why:

1. A postcode lottery for energy bills

Zonal pricing doesn’t reduce overall energy costs, it simply shifts them around. Some areas might see lower prices, but others � especially urban and less affluent communities � would face steep increases.

Research from Fairer Energy Future found that . The idea that energy costs should be determined by geography rather than efficiency and fairness is an unacceptable gamble with people’s livelihoods.

2. Businesses can’t just relocate to cheaper zones

One of the main justifications for zonal pricing is the assumption that businesses will move to areas where energy is cheaper. This is unrealistic. Energy-intensive industries such as steel production are not mobile; UK Steel has explicitly stated that their facilities can’t simply move to new locations on a whim.

Instead of boosting industry, zonal pricing would undermine investment and could accelerate[IF1] deindustrialisation, the industry body warns.

3. It’s bad for economic growth and investment

Far from making the UK’s energy market more competitive, zonal pricing would create instability and uncertainty. Major industry players, ranging from British Glass to the Food & Drink Federation (FDF) and RenewableUK, have warned that .

Price volatility would shake investor confidence and make financing the transition to renewables more expensive.

4. It doesn’t address the real problem: the grid

Proponents of zonal pricing argue that it would reduce curtailment costs � the payments made when there’s too much wind in one area of the country. But instead of solving this issue, zonal pricing would simply shift these costs onto local consumers.

The real fix is investing in a smarter, more connected energy grid. Planned upgrades beyond 2030 already address many of the issues zonal pricing claims to fix, making the policy redundant before it even begins.