Energy bills could fall for millions of households as new plans being developed by ministers could see Brits charged depending on where they live.
A major shake up to Britain’s energy market could see the scrap of nationwide pricing, with a regional system of bills replacing it.
The move could see homes served by offshore wind farms paying significantly less for their power, as supporters of the scheme predict this will cause a blanket drop in bills for all homes.
In 2024, National Energy System Operator (Neso) revealed that wind power accounted for 30% of all electricity generation in the UK making it the largest source of energy for the first time ever.
RenewableUK says that over 25 million homes were powered by wind in 2023, a figure set to rise as wind generated nearly 83 terawatt-hours (TWh) of electricity across Great Britain last year, up from nearly 79TWh in 2023.
Experts believe overall homeowners and businesses affected by the drop in price could total between £4 billion and £5 billion less in electricity charges, The Times reports.
The shake-up plans follow growing concerns over Energy minister Ed Miliband’s Net Zero pledges, claiming he would lower average household energy bills by the end of the decade.
On the contrary, Ofgem is due to announce that average energy bills will rise by £85 a year from April – a figure set to increase further next winter.
Electricity in the UK is currently supplied from a mixture of renewable sources, gas and imports which are carried through underwater cabled.
Experts believe that part of the reason for the soaring energy costs – the UK has one of the highest energy costs in the western world – is due to having a single price for electricity.
Due to the national pricing system, if there’s a shortage of power in London and the southeast, the national price will rise.
UK windfarms are currently paid not to operate due to the existing grid system unable to move power to areas of high demand. Last year, the taxpayer spent almost £1.8 billion paying wind farms to switch off because there was nowhere for the power to go, a figure due to rise to £7.8 billion by 2030.
However, regional pricing would allow for wind farms to export electricity to the Continent, or use lower prices to attract industries.
Inside government sources told the Times that Mr Miliband is moving in favour of the plan, saying: “We would like to make it work and we are very sympathetic to the arguments.
“We are actively looking at it and nothing is off the table.”