Could zonal pricing create fair pricing and transparent bills?

Businesses hoping for energy bills respite in the shape of a new nationwide zonal pricing system shouldn’t hold their breath.

But Energy Solicitors Limited is perfectly placed to provide short-term support — after reiterating its backing for an overhaul of the UK’s unregulated energy sector.

Proponents of zonal pricing — based on geographical supply and demand — argue it has the potential to save billions of pounds each year by making the electricity grid more efficient.

And yet all the evidence points to a wait of at least six years before business and domestic consumers might benefit from a long overdue electricity reboot.

“The prospect of zonal energy pricing is exciting,” said ESL’s Victoria Myers. “Its introduction would require significant regulation and that, in itself, would be progress.

“But experts are talking about the 2030s before anything on this scale could be implemented.

“And for businesses already facing the financial challenge of dealing with soaring energy bills in 2025 that’s a long way off.

“Future respite offers little consolation to those in the heat of the battle right now and you have to wonder how many of these firms will still be operating in an era of zonal electricity pricing.

“That’s where ESL can help. We’re able to make a difference right here, right now and we’ve already saved businesses mis-sold energy contracts thousands of pounds.

“Zonal energy pricing is, on the face of it, all about fair and transparent pricing. And that’s what ESL wants to see most of all.”

Energy consultancy Cornwall Insight said the measure, which would divide the UK into different energy price zones, could take up to a decade to be fully implemented even if ministers make a decision this summer.

Kate Mulvany, principal consultant at Cornwall Insight, said: “Zonal pricing would represent the most fundamental redesign of the GB electricity market in decades.

“The Government’s commitment to a decision by mid-2025 is welcome. But we must be realistic: this is the start of a long road, not the finish line.

“Zonal pricing may still form part of the long-term vision for electricity market reform. But for now, its delivery sits firmly in the next decade.”

While ESL will be keeping a watching brief on what could be the biggest change to electricity pricing in a generation, Victoria and her team remain focused on short-term gains for clients locked into potentially misleading long-term contracts.

“Part of the push towards zonal pricing is that it will be fairer all round and that’s central to the narrative we’re pushing at ESL,” she added.

“We have no problem with brokers and energy suppliers who put their cards on the table and favour transparency and clarity above all. 

“But right now an unregulated energy industry is ripe for unscrupulous groups and individuals to profit. We’re working around the clock to help businesses understand what their energy contracts really mean and to highlight any red flags.”