Why It Could Cost UK Taxpayers £135 Billion

If you live where the wind blows and the sun shines -you win.

Now let’s talk about the rest of us.

• Consumers in the South East and urban hubs (where demand is high and generation is low) would pay significantly more. Under zonal pricing, wholesale electricity prices could spike in these zones, with the cost passed straight down the line to homes and businesses.

• Retail suppliers would need to juggle dozens of new zonal tariffs. Complexity goes up. So do admin costs – and, inevitably, so do bills.
  

Renewable investors, ironically, might hesitate. The system’s unpredictability could raise the cost of capital by 2-3%. Over time, that adds up to £90-135 billion in additional costs to hit net zero – costs that, let’s be honest, will end up in taxpayer-funded subsidies or consumer bills.

This isn’t just a north-south divide. It’s a risk of creating a postcode lottery, where two businesses ten miles apart could face totally different futures.

Zonal pricing could inadvertently deepen regional inequalities. Households in areas with less renewable generation might face higher electricity costs, exacerbating existing disparities. According to Aurora Energy Research, such a system could lead to significant variations in electricity prices across regions, potentially impacting low-income households disproportionately.

Moreover, the UK Energy Research Centre (UKERC) warns that zonal pricing could add £3 billion annually to household energy bills until the 2040s, primarily due to increased costs for renewable energy projects and the need for higher subsidies to offset investment risks.

Yes, zonal pricing might seem like a smarter way to run a modern grid. But smarter doesn’t always mean fairer. And fairer doesn’t always mean cheaper.

What’s missing is a grounded, consumer-focused lens. We can’t solve transmission bottlenecks by offloading costs onto families and small businesses in the South. Nor should we undermine investor confidence just as we need to supercharge renewables and storage solutions.

It’s easy to get lost in models and forecasts. But behind every kilowatt are real people: parents putting kids to bed under rising bills, SMEs trying to stay afloat, schools deciding between heating and hiring. We owe them better than a rushed overhaul of one of the most critical systems in the country.

Let’s not scrap zonal pricing outright – but let’s slow it down. Let’s test, consult, and truly assess the economic and human cost. Let’s prioritise the grid investments that actually fix the root cause: lack of capacity and interconnection. And let’s build a system that rewards clean energy, wherever it’s generated, without penalizing the communities who rely on it.

Because a net zero future isn’t just about carbon. It’s about people, fairness, and resilience. And that’s what The National Energy Hub stands for.