The UK government has announced a comprehensive reform package to modernise the electricity market, confirming the decision to retain a single national pricing model while introducing strategic reforms. These reforms aim to deliver a fairer, cheaper, more secure, and more efficient power system.
“Building clean power at pace and scale is the only way to get Britain off the rollercoaster of fossil fuel markets and protect families and businesses for good,” said Energy Secretary Ed Miliband.
After extensive consultation launched in 2022, the government decided against splitting the country into zonal pricing regions. Instead, it concluded that maintaining a national wholesale electricity price, alongside system reforms, will best serve consumers and investors.
The reform package is part of the government’s broader “Plan for Change,” intended to deliver clean, homegrown power, reduce reliance on volatile global fossil fuel markets, secure energy investments, and bring long-term cost savings for families and businesses.
“Our package of reforms will protect consumers and secure investment as we drive to deliver our clean power mission,” Miliband added.
**Strategic Spatial Energy Plan**
Central to the reform is the upcoming Strategic Spatial Energy Plan, to be published by NESO (National Energy System Operator) in 2025. It will outline how and where new energy projects should be developed across Great Britain up to 2050, providing investors with long-term clarity and helping to reduce connection delays and costs. Commissioned jointly by the UK, Scottish, and Welsh governments, the plan is designed to “speed up development, cut grid connection waiting times, and help reduce costs.”
The government is also collaborating with Ofgem on a review of Transmission Network Use of System charges, which currently penalise generators that rely heavily on the transmission grid. The goal is to incentivise building generation where it’s needed, enhance cost predictability for long-term projects, lower the risk of investor volatility, and support a cheaper national electricity system.
**Grid Modernisation and Efficiency Boost**
The government is aggressively targeting legacy infrastructure issues, citing independent NESO advice that up to £4 billion in constraint payments could be avoided by 2030 if key transmission upgrades are completed. These include the Norwich to Tilbury transmission line and the Sea Link offshore cable between Kent and Suffolk. A new consultation later this year will explore reforms to enhance grid balancing flexibility, including access to smaller assets such as battery storage. NESO’s Constraints Collaboration Project is also evaluating systemic improvements to reduce inefficiencies and energy waste.
**Direct Benefits to Households and Communities**
To ensure the public benefits directly from clean energy deployment, households within 500 metres of new or upgraded electricity transmission infrastructure will receive bill discounts of up to £2,500 over ten years. Coastal and rural areas hosting clean energy projects will be eligible for community investments, including upgraded transport links, facilities, and apprenticeship programmes.
The government’s reforms are positioned as the most ambitious push toward clean power in British history. Over the past year alone, initiatives have been approved to power the equivalent of 2 million homes, and £14.2 billion has been committed to Sizewell C, marking the largest nuclear expansion in five decades.
Ultimately, these reforms reflect what the government calls a “fundamentally different approach” to energy planning—focused on long-term national interest, investor certainty, and real economic benefits for working families.
