Greg Jackson, the CEO of energy supplier Octopus, has taken to YouTube to explain how zonal pricing could save energy customers £3.7 billion a year.
He started by outlining the failings of the current energy market, which was designed when a few massive coal-fired power stations supplied the bulk of the country’s electricity. With renewable generation now being located far from demand centres due to national pricing, he said the system was leading to waste. As mentioned on an accompanying blog post:
“Take grid constraints for example: often, we are generating so much wind in places like Scotland that our cables can’t transport it to the south where it needs to go. In the current system, the solution is to simply switch the turbines off.”
According to Jackson, because producers are paid to shut down, this still costs money while wasting huge amounts of generation capacity. What’s more, consumers have to pay more for electricity as other systems fill the gap. He says zonal pricing could deliver much cheaper electricity prices to regions with ample renewable generation, potentially attracting energy intensive businesses to these areas. Jackson also dismissed criticisms that zonal pricing would lead to a postcode lottery, pointing out that prices already vary across the country.
If introduced, zonal pricing will only affect the electricity element of your fuel bill. If you want to save money on gas central heating, Xgas can provide a boiler service in Chester and other places around Wrexham to check efficiency and reliability. Get in touch to also learn about care plans.