Ed Miliband backs plans to charge homes in South higher electricity rates as critics slam 'postcode lottery'
23 April 2025, 20:15 | Updated: 23 April 2025, 22:52
Ed Miliband is preparing to back plans to charge homes in South more for electricity, with critics slamming the proposed 'postcode lottery' system.
Listen to this article
Loading audio...
The energy secretary's plans would mean houses in the South would pay more for electricity than those in Scotland and the North.
The zonal pricing system would effectively demarcate the UK's single national power market into separate regions.
The change could reduce household electricity bills overall by reducing the necessity for grid upgrades, according to supporters.
However, critics say the new system could create a 'postcode lottery' - discouraging investment in wind and solar farms.
Mr Miliband has been advised by government officials to move forward with the changes, the Telegraph reported.
Read more: Britain’s solar industry at risk as Miliband looks to ban China's ‘slave-trade’ solar panels
'Disparities'
Sources at Whitehall have reportedly not denied the claim - however, no final decision has yet been made.
A decision is likely to be announced by mid-2025, according to ministers.
There's still a chance the changes could be blocked or 'watered down'.
Moving to regional power pricing would be the most significant overhaul of the electricity market since the 1990s.
Supply and demand in each regional zone would determine electricity prices under the system.
In parts of the UK where there is more wind generation - including Scotland - households could pay reduced rates for electricity than homes in the South.
Debate continues about whether the changes could decrease consumer bills.
The system may create 'regional disparities' in household bills and deter potential renewable energy investors, according to SSE and Scottish Power.
Slowing down the implementation of wind and solar farms in the next few years risks jeopardising Miliband's pledge to deliver a "clean" power system by 2030.
'Congested'
Octopus Energy, Ovo Energy and Citizens Advice support the scheme and say that the pricing system could reduce costs for all households overall.
The National Energy System Operator and Ofgem also support the changes.
Bills could be reduced due to a more 'efficient' system that stops "constraint" payments to wind farms and reduces the necessity to invest in new infrastructure that is mostly funded through levies on consumer bills.
The Telegraph reports that Britain paid an average of £180,000 an hour to turn off wind farms in the first two months of this year due to the grid being too 'congested' to accept their power.
A zonal pricing system could save more than £3.7bn per year, say FTI consultants.
Is Nigel Farage wasting his time 'attacking' Ed Miliband?
'Controversial'
Despite support for the policy, polling suggests the changes are deemed 'controversial'.
Across England and Wales, 58% of people opposed regional pricing, according to a survey by Renewable UK - a trade association which represents wind farm operators.
Only 14% of those surveyed were supportive of the system.
A spokesman for the Department of Energy Security and Net Zero said: “In an unstable world, the only way to guarantee our energy security and protect consumers from future energy price shocks is by moving towards home-grown power.
“We are considering reforms to Britain’s electricity market arrangements, ensuring that these focus on protecting bill payers and encouraging investment. We will provide an update in due course.”
