UK Government confirms national wholesale electricity pricing in REMA review

The UK Government has confirmed its decision to retain a single national wholesale electricity price, rejecting proposals for zonal pricing, as part of its Review of Electricity Market Arrangements (REMA) to support a decarbonised, cost-effective, and secure energy system.

The UK Government has today announced a significant decision as part of its Review of Electricity Market Arrangements (REMA), confirming its commitment to retaining a single national wholesale electricity price. This outcome means proposals for a more complex zonal pricing system, which would have seen regional variations in energy costs, will not be implemented.

The REMA review, initiated with a goal to ensure the electricity market supports a decarbonised, cost-effective, and secure energy system for the future, had considered various approaches, including both a shift to zonal pricing and reformed national pricing. However, the government has concluded that maintaining a single national wholesale price, alongside substantial reforms to the existing model, is the most effective path forward.

This decision has the following impact for the UK energy market, as stated by the government:

• Market consistency: The continued use of a national pricing structure provides a consistent wholesale price across Great Britain, providing certainty under a stable and predictable framework.
• Investment signals: This approach aims to provide stronger signals for the efficient siting of new generation assets through the reform of Transmission Network Use of System (TNUoS), removing the additional risk and uncertainty that may have come from zonal pricing.
• Operational efficiency: The decision seeks to improve overall operational efficiency within the electricity system, with plans to “upgrade the country’s outdated infrastructure”.
• Decarbonisation support: The government indicates this path is intended to facilitate the timely delivery of new renewable generation, from investment and construction to connection, supporting decarbonisation efforts and aiming to lower consumer bills.

SmartestEnergy acknowledges the government's announcement regarding national electricity pricing. We continue to monitor the detailed reforms emerging from the REMA process, and our focus remains on supporting our customers in navigating market developments and securing their energy supply.

For further information on these market developments, customers are encouraged to contact their SmartestEnergy account manager.