ED Miliband has reportedly ditched plans to introduce zonal pricing in the UK which would\u00a0have given Scots cheaper electricity.<\/p>\n
The Energy Security Secretary has allegedly decided not to proceed with the scheme that has been strongly backed by Octopus Energy<\/a>, according to The Guardian<\/a>.<\/p>\n Octopus Energy has repeatedly said such a scheme could give Scots some of the cheapest energy in Europe<\/a>.<\/p>\n Zonal pricing would split the UK into regions based on local supply and demand, meaning Scotland would likely have benefitted enormously due to its abundance of renewables.<\/p>\n The proposals would have set lower electricity prices in areas where supply far outstrips demand, in an attempt to encourage industry to move into those areas and reduce the need to switch off generation.<\/p>\n READ MORE:\u00a0What is the point of Octopus Energy’s wasted wind tracker?<\/a><\/strong><\/p>\n One source told the paper: \u201cThe Government has been weighing this up carefully and concluded that the benefits<\/a> of delivering the clean power mission at pace, particularly given the expected impact of imminent grid upgrades; the need to deliver on the coming renewables auctions; and the significant risk premium being attributed to the UK by international investors, would outweigh the purported benefits of zonal pricing \u2013 which at any rate would take beyond the next election to implement.\u201d<\/p>\n While Octopus Energy backed the proposals for zonal, the scheme was opposed by the likes of SSE and Scottish Power who warned investors could be put off.<\/p>\n Octopus Energy CEO Greg Jackson (Image: Octopus Energy) Supporters of zonal pricing argued\u00a0it would have helped resolve\u00a0the issue of wind farms being paid to turn off.<\/p>\n Scotland’s biggest wind farm \u2013 Seagreen \u2013 is paid to\u00a0not generate\u00a071% of the time it could be. As a result, the effective cost of electricity it generates is four times higher than it should be.<\/p>\n The\u00a0UK has one national energy price despite the cost of producing electricity differing\u00a0throughout the day across the country.<\/p>\n If an offshore wind farm in Scotland produces more electricity than the network can handle it is paid to turn off, or be “constrained”,\u00a0and a\u00a0gas<\/strong><\/a>-fired power plant in the south of England is paid to turn on.<\/p>\n