Post: Committee calls for evidence on zonal pricing

Committee calls for evidence on zonal pricing

Locational Marginal Pricing (LMP) in the UK, often discussed as “zonal pricing”, is a proposed wholesale market model that would divide Great Britain into different zones, each with electricity prices based on local supply, demand, and grid constraints.

While tabled as a way to reduce network costs and better incentivise renewable siting, the government shelved these plans in favour of maintaining a unified national price in July 2025. But in February 2026, the Energy Security and Net Zero Committee opened a fresh call for written evidence on wholesale electricity market reform, including the question of locational pricing/LMP versus a reformed national pricing model.

The Committee is seeking views on:

• whether the Government given sufficient thought to what a reformed national pricing model could look like, as compared to the balance of risk and opportunity in a Locational Marginal Pricing model?
• if the Government considered the most useful evidence in assessing the impact of different reform options?
• how do various options for market reform impact achieving zero carbon electricity generation and wider net zero targets?
• is there still a case for wholesale reforms towards a locational pricing model within the context of the government’s 2030 clean electricity mission and energy security aims?
• how does the government intend to incentivise the energy sector to accelerate development and generation of clean power within its planned market reforms?

GridBeyond Director of Origination (Europe & APAC), Scott Berrie said: “Reopening this topic reintroduces uncertainty and uncertainty is expensive. Whatever your view on LMP vs national reform, one thing is clear; pricing design is now back on the table, and it will shape where clean power gets built, how it’s financed, and whether 2030 stays realistic.”

Responses are requested by 27 March.