The UK government has announced new changes to the national electricity markets with the hopes of creating a system that is fairer, more secure, and affordable for working families and businesses
The changes aim to boost clean energy investment, reduce bills, and modernise the country’s outdated energy infrastructure.
The national pricing model is staying
After long consultations, the government has decided to keep a single national wholesale electricity price, rather than move to a regional pricing system. This means that households and businesses across Great Britain will continue to pay the same rate for electricity, regardless of where they live.
While the pricing model will remain the same, the government is introducing key reforms to make the system more efficient and investment-friendly. This approach is expected to support long-term goals of building a resilient and clean energy system, while maintaining fairness for consumers.
Planning for future energy projects
One central part of the changes is the creation of a Strategic Spatial Energy Plan, to be published next year by the National Energy System Operator (NESO). This long-term roadmap will guide where new clean energy infrastructure should be developed on land and at sea through to 2050.
By coordinating where energy projects are located, the plan hopes to reduce delays, lower connection costs, and provide greater certainty for investors. This should help get more clean power onto the grid faster and more affordably.
Fixing the grid and reducing waste
The government is also tackling inefficiencies in the power system that have been driving up costs. A key focus is reducing “constraint payments”, costs paid to energy generators when the grid cannot transport electricity from where it’s generated to where it’s needed.
According to NESO, up to £4 billion in these payments could be avoided by 2030 if critical grid upgrades are completed on time. Projects like the Norwich to Tilbury transmission line and the Sea Link cable between Kent and Suffolk are already underway to help address this issue.
The government is also working with NESO to explore new tools and technologies, including battery storage and smaller, flexible energy assets, to balance supply and demand better.
Transmission charges to be reviewed
Another significant change involves reviewing the transmission charges that energy generators pay. Currently, these fees vary year by year, making it harder for investors to plan long-term projects. The government will work with the regulator Ofgem to make these charges more predictable and to better incentivise developers to build where energy is most needed.
Benefits for households and communities
Alongside the system-wide reforms, the government has introduced measures to ensure local communities benefit from clean energy projects. Homes located near new or upgraded transmission infrastructure could receive electricity bill discounts of up to £2,500 over 10 years. Rural and coastal communities hosting infrastructure may also receive investment in local services, transport, and apprenticeships.
A Reformed National Pricing Delivery Plan will be published later this year, setting out the next steps for implementing these reforms in partnership with Ofgem, NESO, and the energy industry.
These changes are part of the government’s clean energy mission to secure affordable, homegrown power and end reliance on volatile global fossil fuel markets.
