A coalition of offshore wind developers, representing around 33GW of Scotland’s future clean power capacity, has urged the UK Government to immediately rule out zonal pricing and adopt workable reforms to benefit consumers and protect investment.
In a letter to Keir Starmer MP, Prime Minister of the United Kingdom, and John Swinney MSP, First Minister of Scotland, 17 offshore wind developers in Scotland, with the support of industry trade bodies including Scottish Renewables, have warned investment could be halted and projects left unviable by the “unmanageable risk” of zonal pricing proposals.
The UK Government is currently considering a proposal known as zonal pricing, which would divide the UK into different pricing zones and see consumers face varying electricity costs.
However, industry has warned this could lead to higher energy bills for both households and businesses. Analysis has found that even a modest increase in the costs of building renewable projects would negate any potential savings from zonal pricing.
Scottish Renewables is urging the UK Government to introduce a Reformed National Market, a combination of measures to improve existing market arrangements.
Political issues
Meanwhile, the boss of a major energy group has warned that zonal pricing could mean households in London are paying inflated electricity prices to subsidise cheaper prices for Scots.
Tom Glover, UK country chairman of the German energy group RWE, made made the critical comments as he predicted "political issues" should energy be cheaper in some parts of the country and not others.
It comes after Aberdeen & Grampian Chamber of Commerce chief executive Russell Borthwick recently voiced fears to energy secretary Ed Miliband that a shift to zonal pricing would jeopardise investment in ScotWind, and the 25,000 jobs it would create.
Now Glover, The Times reports, has said there would be “political issues if certain parts of the country get materially cheaper energy than other parts of the country".
FTSE 100
The UK's flagship share index, the FTSE 100, was up 56-points at 8,626 shortly after opening this morning.
Brent crude oil futures were up 0.13%, trading at $71.12 a barrel.
Companies reporting today
Diversified Energy Company | Full Year Results |
F&C Investment Trust | Full Year Results |
Marshalls | Full Year Results |
Phoenix Group | Full Year Results |