The head of Britain's energy regulator, Ofgem, has appealed for unity within the energy industry amid escalating disputes over proposed electricity market reforms.
A decision is expected within weeks regarding the potential replacement of the country's unified electricity market with a zonal system. This would create multiple market zones, each with its own pricing structure.
Under such a system, households in areas with abundant electricity generation could benefit from lower prices compared to those in regions with high demand and limited generation capacity.
As the decision approaches, energy organizations have intensified their campaigns, employing tactics such as contradictory research from third-party consultants, opinion surveys, and coordinated letters to government departments, all aimed at influencing the Energy Secretary's decision.
The intense debate, particularly on social media, prompted a rare intervention from Ofgem's chief executive, Jonathan Brearley, who cautioned against "lobbying on polarised positions." He urged companies to engage in "an honest conversation" about the proposed changes.
The proposals have divided the industry. Supporters, including Octopus Energy, argue that zonal markets could enhance efficiency, reduce waste, and lower consumer bills.
Opponents, including some major renewable energy developers, express concerns that a radical market overhaul could undermine green energy investment, potentially negating any savings for consumers.
Energy companies are planning significant investments to upgrade Britain's electricity grid to facilitate the transition to clean energy and accommodate the increasing adoption of electric vehicles and heat pumps.
Brearley acknowledged the divided opinions at an industry conference, stating, "There are clear benefits of a zonal system, but equally there are risks that any change undermines investment and drives up costs."
He emphasized the need to balance system efficiency with the lowest investment costs and the needs of consumers.
Brearley's call for calm followed earlier comments in favor of zonal energy pricing, which he later clarified were his personal views and not those of Ofgem.
"I have my preference, but thankfully this decision that will be made by the secretary of state,” Brearley said. “And, ultimately, when the secretary of state decides, let’s get behind that and deliver for customers.”
