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New Energy World™
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A country divided: exploring the pros and cons of zonal electricity pricing
18/6/2025
10 min read
Feature
A war of words has broken out in the electricity industry about whether to split Great Britain’s electricity market into smaller zones, in the hope of reducing costs and making more efficient use of renewables. Janet Wood explores the current complex situation, and how we got here.
Where did the GB market come from? The single power market dates back to 2005, when the British Electricity Trading and Transmission Arrangements (BETTA) allowed buyers and sellers in Great Britain to trade in a market across England, Wales and Scotland for the first time.
When BETTA was introduced, energy regulator Ofgem explained that: ‘Scottish customers are not benefitting from the competition which is now established in the wholesale market in England and Wales’ (referring to a previous reform that introduced direct contracts between buyers and sellers). The regulator said Scottish generators would be able to sell their electricity to customers in England and Wales (because, then as now, Scotland produced more electricity than it needed). In addition, BETTA would allow ‘more competitors to enter the Scottish wholesale and retail markets, which will put even more pressure on prices to the benefit of consumers and businesses’.
BETTA fulfilled the important aim of creating liquidity in the power market. More generators selling power and more retailers buying it would both increase competition to drive the price down, and provide a route to market for new participants, who now had more potential counterparties.