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The Herald Scotland

SNP must tread carefully on energy market reform

While electricity market reform is ultimately a matter reserved to Westminster, the SNP's position will carry weight. There's also a political calculation to be made here. If the proposed changes have unintended consequences for Scotland, the party will not be able to distance itself from the fallout. Zonal pricing, in essence, would divide the UK into geographic zones with electricity prices determined by local supply, demand, and grid constraints. Advocates claim it could mean some of the lowest energy bills in Europe for Scottish households. Prominent voices within the SNP have jumped on this, presenting it as further evidence that Scots are disadvantaged by remaining part of the UK. However, the party must take a much longer-term view that keeps us on the road to net zero and maintains public support for Scotland's clean power ambitions. All policy makers should be focused on reducing energy bills, which have risen to frankly scandalous levels in recent years, chipping away at support for the energy transition in the process. However, zonal pricing is no silver bullet. Even if zonal pricing could reduce bills, it's been suggested it would take at least seven years for the benefits to be felt. Meanwhile, project development costs could increase under a more fragmented system, likely cancelling out any long-term savings for consumers. The future success of the Scottish economy is largely reliant on maximising the opportunities of the energy transition. Our renewables sector has built strong international momentum, but we are competing globally for capital. Investors looking at narrowing project margins can and will go elsewhere if they sense instability. On the same day that SSE announced job cuts, citing 'a range of economic and other factors', Biggar Economics warned in new research that zonal pricing could put £30 billion of investment at risk and threaten 8,000 jobs in onshore wind – precisely the kind of skilled jobs Scotland's young people need. The sector can't afford more instability. Rather than pursuing disruptive reforms, governments should focus on effective steps – like decoupling electricity prices from the cost of gas – which remains the main driver of high bills. This debate shouldn't be framed as a choice between supporting developers or cutting costs for consumers. With the right reforms, both are possible. The SNP should commit to a pragmatic, evidence-led approach to electricity market reform – one that supports investment, delivers value, and strengthens Scotland's long-term economic prospects. It's only with a credible position on big issues like this that the SNP can maintain the trust of voters in Scotland, and their backing to drive us towards a green industrial future. John Cumming is a senior client manager with Charlotte Street Partners Agenda is a column for outside contributors. Contact: agenda@