
Zonal pricing — what is it good for?
Zonal pricing won’t cut bills—it just shifts costs, creating an unfair postcode lottery. It’s bad for businesses, investors, and consumers.
Report releasedMarch 21, 2025
View ReportSee the full report on the Green Britain Foundation website
We believe renewable energy is both an economic and environmental priority. By investing in domestic renewables (such as wind, solar, and green gas), the UK can significantly reduce vulnerability to global fossil-fuel price fluctuations, lower household bills, create green jobs, and more rapidly meet net zero ambitions. Implementing the right frameworks will allow us to unlock these benefits and move decisively toward energy independence.
We propose creating a tax-free zone on energy bills for lower-consumption households by restructuring green levies and VAT. Instead of charging a flat rate, these fees would rise progressively with higher usage, incentivising greater efficiency while providing relief to the most vulnerable.
Although the ban on onshore wind has been lifted, we recommend further steps to restore investor confidence and accelerate development. This includes treating onshore wind planning applications similarly to other renewables, enabling swift progress and resuscitating previously blocked or stalled projects.
We support Labour’s plan for a publicly owned clean-energy company, GB Energy, and propose extending its remit to include a rooftop solar and battery installation programme for millions of households. Under this scheme, GB Energy funds and owns the installations, splitting economic benefits with residents through lowered bills. This approach accelerates domestic clean-energy generation, avoids massive grid upgrades, and dramatically cuts overall electricity demand.
For large private-sector energy projects, we propose that the government receive a percentage of revenues (rather than profit) in exchange for approvals. This ensures the British public shares in the financial success of domestic green-energy developments, building a source of funding for our net zero transition.
We propose supplementing heat pumps with a national rollout of green gas mills powered by grass-based anaerobic digestion. Because this low-carbon gas can flow through existing pipes and boilers, it presents a cost-effective, lower-disruption path to decarbonising home heating. Additionally, we suggest simplifying the planning process for green gas facilities and assessing how to integrate them into Contracts for Difference (CfD) mechanisms for stable pricing.
We want to see outdated planning rules—especially those affecting onshore wind, solar farms, and green gas—overhauled to encourage rapid adoption. Our recommendations include allocating greater resources for local authorities, introducing a “prior notification” process for simpler projects, and expanding permitted development rights for rooftop solar or small domestic wind turbines.
We believe that capping the wholesale price of domestically produced gas at cost of production plus a small profit margin (e.g., 2%) would protect both households and businesses from global price spikes, thereby eliminating large windfall profits for North Sea producers.
We aim to reform the current system in which gas-fired generation sets the price for all electricity. By introducing a “levelised cost” model or similar framework, we can reflect the true cost of each energy source and ensure the benefits of cheap renewables flow directly to consumers.
We propose limiting the profit margins of Distribution Network Operators (DNOs) and Gas Distribution Networks (GDNs) to 1.5%, bringing them in line with retail providers. This step could save consumers billions of pounds annually, ensuring these natural monopolies invest sufficiently in upgrading infrastructure rather than paying out excessive dividends.
Lastly, we call for a rule preventing large private utilities from distributing dividends until they fulfill mandated infrastructure upgrades. Under current practices, taxpayers often bear the brunt of these costs while shareholders profit. Our proposal seeks to balance investment, performance, and reasonable shareholder returns.
“The Road to Energy Independence” outlines how Britain can end its reliance on imported fossil fuels and unlock the vast economic potential of renewables. By implementing these ten measures—ranging from progressive energy tariffs to green gas development to planning and market reforms—we can achieve energy independence while lowering household bills, creating green jobs, and delivering on our net zero commitments. Our plan is designed for swift adoption, ensuring we seize today’s opportunity to build a resilient, low-carbon economy that benefits us all.
Zonal pricing won’t cut bills—it just shifts costs, creating an unfair postcode lottery. It’s bad for businesses, investors, and consumers.
Report releasedMarch 21, 2025
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