The Rt Hon Sir Keir Starmer MP
Prime Minister
10 Downing Street
London
SW1A 2AA

19 June 2025

Dear Prime Minister,

We are writing to you on behalf of Fairer Energy Future – a coalition of organisations united at a critical moment to urge the government not to delay progress or increase the cost of clean power by adopting zonal pricing.

We want to ensure that you are fully aware of the serious risks zonal electricity pricing poses—not only to the UK’s decarbonisation targets, but also to consumer costs, national security-critical industries such as steel, and to public confidence in the government’s ability to deliver a fairer, greener future.

Fairer Energy Future is a coalition of leading UK and international renewable energy companies and some of the largest UK manufacturers committed to ensuring that the transition to clean power is both affordable and equitable for all. Together, our members invest in and operate a significant share of the UK’s onshore wind and renewable energy infrastructure.

Our research this year has shown that zonal pricing threatens to increase the cost of capital in the short term and raise the long-term cost of decarbonisation. These costs will ultimately fall on consumers and voters, risking higher energy bills under a Labour government. Public sentiment on the topic is also clear. A recent survey commissioned by Fairer Energy Future found that 70% of UK residents prefer a national pricing model over zonal pricing. And, importantly, 85% of respondents in the same survey thought the zonal pricing proposals were “not very fair”.

Moreover, £30bn worth of scheduled investment in Scottish renewable energy projects and 8,000 jobs could be put at risk if zonal energy pricing proposals are backed by the government, according to analysis by the independent consultancy firm Biggar Economics.

International examples are cautionary: Italy’s zonal system is linked to some of the highest energy prices in Europe, while Norway was forced to abandon a similar model due to public backlash over regional disparities.

Zonal pricing would not only raise costs for consumers but also undermine trust in the government’s promise to make people better off. It would destabilise investor confidence, jeopardise the upcoming Contracts for Difference (CfD) round, and increase the cost of clean energy. Even a delayed implementation post-2030 would introduce damaging uncertainty today, threatening progress toward clean electricity and net-zero targets.

We would strongly urge your government to rule out zonal pricing due to the risks it poses to consumer costs, investor confidence and public trust.

We instead support an Enhanced National Pricing system, which is fairer, cheaper, and more immediately deliverable.

The idea here would be to focus on already-planned grid upgrade projects, in tandem with bolstering the National Energy System Operator’s tools for balancing the electricity system, which together will eliminate current constraints on the network and reinforce the UK’s energy security, while ensuring cheaper electricity in the long-term across the country, not just for the lucky few in one or two zones.

Yours sincerely,

Fairer Energy Future