Ofgem CEO voices support for zonal pricing

The chief executive of Ofgem has said he supports a shift to zonal power pricing.

In an interview for a podcast Jonathan Brearley said that with the amount of change taken place within the sector, he didn’t it was “credible” to continue with the current system of national wholesale prices.

“We’ve had a robust debate within Ofgem and we have come to the view that zonal pricing is the best way forward,” he told Montel’s podcast.

A number of industry groups have voiced concerns over zonal pricing which is being considered by the Government as part of a review of electricity market arrangements,  arguing it would undermine investment in low carbon energy.

Brearley said the vigorous industry discussion on the issue was similar to that seen around the introduction of the Contracts for Difference subsidy scheme.

“People told me at the time this was too disruptive, and this wasn’t going to be good for investment and it drove a huge increase in investment,” he said.