FIRST Minister John Swinney has declined to take a position on zonal pricing, a debate which could shape the future of the energy system in the UK.
UK Government ministers are currently considering what a reform of the national electricity pricing system should look like, with two primary options on the table.
The first, zonal pricing, would set different electricity prices across UK regions based on local supply, demand, and grid constraints. It has the support of the UK’s largest electricity supplier, Octopus Energy.
On Monday, the firm and 3700 of its small business customers wrote to the UK Treasury asking for Labour ministers to back zonal pricing.
Scottish families could have some of the cheapest energy bills in Europe with zonal pricing – Greg Jackson (@g__j) of Octopus Energy explains why 💸 pic.twitter.com/8Bov530Cwt
— The National (@ScotNational) April 10, 2025
The second, reformed national pricing, would keep a single price in place by adjust market rules to better reflect locational costs and reduce inefficiencies.
Also on Monday, Chris O’Shea, the chief executive of Centrica (the firm behind British Gas), argued against zonal pricing, claiming it would do more harm than good.
Instead, he called for a “fairer energy system that encourages efficiency and cuts complexity. No standing charges, one price for electricity and gas, and a social tariff to help those struggling”.
Asked about the two opposing interventions and where the SNP Government stood on the debate, the First Minister declined to take a side.
“There's obviously a range of opinions on the question of zonal pricing and a range of assessments about the impact that would make,” he said. “Obviously that's the subject of the discussion.
“I have further dialogue in the course of this week about zonal pricing that will be taken forward.
“We're engaging with the UK Government on the question of zonal pricing, and we will continue that dialogue as UK ministers come to the conclusions on this particular question.”
Pushed on whether SNP ministers had been arguing for or against zonal pricing during their engagement on the issue with their UK counterparts, Swinney again declined to take a side.
He said: “Well, we're engaged with the UK Government on that question because I see there are different perspectives on zonal pricing, and it's important that all aspects of the debate and the discussion are properly and fully explored before conclusions are drawn and we'll engage on that.”
Last year, SNP minister Maree Todd called for zonal pricing to be brought in, saying it could address a “long-standing injustice” for Highlanders who have faced higher energy bills.
However, the SNP as a party or as a government has not formally backed or opposed the idea.
