National Grid boss urges Miliband to reject regional energy shake-up

Telegraph

15-05-2025

The boss of National Grid has urged Ed Miliband to reject proposals to charge regions different prices for electricity.
John Pettigrew says so-called zonal pricing, which could soon be rolled out by the Energy Secretary as part of his net zero overhaul, would cause huge disruption across Britain.
While some argue it would make the grid more efficient, Mr Pettigrew has claimed it would pile pressure on a power system already under strain.
In particular, he said it would serve as an unnecessary distraction as policymakers seek to stave off the threat of blackouts while trying to decarbonise the grid by 2030.
He said: 'You have to look at zonal pricing in the context of everything else that's going on with retail reform, connections reform, the massive increase in infrastructure investments, the rollout of smart meters.
'And I think to add anything else to all that change, there needs to be a high bar. So there may well be a time when zonal pricing is right for the UK, but I don't think it's now.'
Mr Pettigrew gives the example of surging demand from data centres, which he predicts will consume nearly a third of the UK's generating capacity within a decade.
He said: 'The electricity network in the 2030s will look very different to what it is today. And I think we should only look at zonal pricing once we got through all this significant network change and market reform.'
Mr Pettigrew also warned that the huge investments needed to help the grid hit net zero would inevitably mean bills rise over the next decade, with cash set to be used to help the grid connect with offshore and Scottish wind farms.
However, this will also generate savings in the long run, he said, as it will prevent the UK from having to pay wind farms to switch off by increasing capacity.
Mr Pettigrew was speaking as the National Grid published its full-year results, which revealed that its pre-tax profits rose by 20pc to hit £3.7bn in 2024-25.
His intervention on zonal pricing comes at a crucial time.
The Energy Secretary is leading a long-term review of the UK's electricity markets, which he hopes will reduce the country's dependence on gas and boost energy security.
Zonal pricing is a key proposal within the review, which is set to be concluded next month.
If approved, Britain's current single national power market would be abolished, and the country would instead be split into a dozen or so regions.
Each would have different charges based on supply and demand.
Meanwhile, the National Grid chief's comments come as he continues to battle the fallout from Heathrow's power outage in March, which was caused by a fire at a nearby substation.
Mr Pettigrew admitted that more must be done to boost resilience to ensure a similar shutdown doesn't happen again.
A full report into the incident is set to be published in July, which is expected to highlight the Grid's failings.
Mr Pettigrew said: 'I do think it's an important question that when the investigation is done, we stand back and look at resilience, because with electricity being more important to society, it's really important.'
However, he highlighted how the Grid is already planning to invest £60bn over the next five years, which will be paid partly through levies on consumer bills.
He said: 'When I look at the overall asset health of our network in the UK, then we have committed to invest £60bn over the next five years,' he said. 'It's a huge amount of investment going into the networks.'
Mr Pettigrew also confirmed that he will step down later this year to be replaced by Zoë Yujnovich, a former director at Shell.