The government‘s recent unveiling of proposed reforms to the electricity market has sparked controversy within the renewables industry, as Solar Energy UK and RenewableUK express scepticism and concerns.
The proposed shift to zonal pricing, aimed at restructuring the wholesale electricity market, is met with apprehension by industry leaders.
While zonal pricing theoretically aims to incentivise generation closer to demand and alleviate transmission grid constraints, concerns persist regarding its potential to introduce additional market uncertainty and inflate capital costs for renewable energy projects.
Ana Musat, Executive Director for Policy and Engagement at RenewableUK, said: “The consultation is still inviting views on whether zonal pricing can be feasibly introduced while maintaining investor certainty.
“However, given stronger locational constraints faced by projects – such as planning hurdles, including a de-facto ban on onshore wind in England or grid connections, the influence of zonal pricing on location choices will likely be limited.”
Gemma Grimes, Director of Policy and Delivery at Solar Energy UK said: “While the government has chosen to emphasise the potential role of backup gas power in its announcement today, the renewables industry is doing all it can to deliver a carbon-free electricity system.
“New, grid-scale energy storage can make this a reality by storing power from renewables, enabling us to use clean, affordable power 24/7, 365 days a year. The storage sector is set to grow leaps and bounds in the coming years, to keep pace with the renewables revolution.”
