Ed Miliband has abandoned plans to charge different prices for electricity in various parts of the country. The Government said on Thursday it has decided to retain a single national wholesale price.
Supporters of zonal pricing insisted it would save billions of pounds each year by making the electricity grid more efficient but critics said it would create a postcode lottery where people face an unfair disparity in bills.
Sam Richards, CEO of pro-growth campaign group Britain Remade, said: “The government had a clear opportunity to cut energy bills, unlock clean power and fix a broken system but they’ve given in to the fearmongering of the big energy companies and ducked it. By refusing to back local pricing, ministers are choosing to keep households paying more than they should.“
Zonal pricing would have seen prices based on how much electricity is available, meaning areas like Scotland, which generate large amounts of power, would have lower market prices.
But it also means market prices in other parts of the country, such as the South East, would have been higher.
Energy Secretary Ed Miliband said: “Building clean power at pace and scale is the only way to get Britain off the rollercoaster of fossil fuel markets and protect families and businesses for good.
“As we embark on this new era of clean electricity, a reformed system of national pricing is the best way to deliver an electricity system that is fairer, more affordable, and more secure, at less risk to vital investment in clean energy than other alternatives.”
The Government said that its package of reforms means it will be taking more control over planning the energy system and deciding where clean energy infrastructure is located.
It said this will help bring down bills by making the system more efficient and reducing the cost of running the electricity network.
The reforms also include plans to map out new energy projects across Britain’s land and sea up to 2050, as well as reviewing the charges that energy generators pay to access the transmission network.
Claire Coutinho, shadow secretary of state for energy security and net zero, criticised the plans which she said will see the UK “lose businesses to more polluting countries with cheaper energy”.
“Ed Miliband promised to cut energy bills by £300, but instead as I warned, bills are going up and it’s increasingly obvious that this promise was a fantasy,” she said.
“Even Downing Street are waking up to the fact that Ed’s net zero zeal is going to impose huge costs on bills and jobs as we lose businesses to more polluting countries with cheaper energy. That’s bad for households, our economy and emissions.”
