Electricity Market: Review

Thursday 10th July 2025 Written Statements

[The Secretary of State for Energy Security and Net Zero (Ed Miliband)]

Today my Department is announcing the final decision of the review of the electricity market arrangements (REMA) programme.

The REMA programme was launched in 2022 to consider how to reform Great Britain’s electricity market to deliver a fair, affordable, secure, and efficient clean power system.

On taking office, we inherited a decision on whether to retain the current national system in which all areas in Britain pay the same wholesale price for energy or undertake a major overhaul to split the country into different pricing zones depending on their proximity to where energy is generated.

The central challenge we face as a country is the urgent need to get off expensive, insecure fossil fuels and deliver an electricity system that meets double the level of today’s electricity demand by 2050. In doing so, we have to design the network in a way to ensure that generation and transmission is built in the right places, so that we can effectively provide power to where it is needed, minimise network constraints, and keep bills as low as possible.

This Government have shown already we are not content to accept the slow and unco-ordinated pace of planning and decision-making of the past. We know reform is needed.

Throughout the decision-making process I was guided by three key priorities: identifying which option would be the fairest outcome for families and businesses in the near and long term; which reform can deliver energy security, will best protect consumers and ensure bill savings as soon as possible, as part of accelerating to clean power by 2030; and, which is the approach that will do most to ensure the investment, jobs and growth we need right across the economy.

We have weighed the options carefully. The Government have decided to reform the system while retaining a single national wholesale price, which I have concluded is the best way to achieve a clean power system that is fair, affordable, secure, and efficient. This will see Government take on more responsibility in planning the system and determining where clean energy infrastructure is located, based on what is needed where in the long-term—rather than the fragmented, ad hoc approach that this Government inherited.

This will complement the fundamentally different approach to building the energy system and infrastructure that this country needs. After years of delay that has seen consumer costs and constraint payments rise, the Government are rapidly making possible the building of the network, reforming the planning system, and finally transforming the grid connections queue to get the projects we need for clean power and growth moving.

These changes will make it possible to bring down energy bills for good, by making the current system more efficient, ensuring low-cost investment into homegrown clean energy projects, and keeping down the costs of running the electricity network.

The key elements of reformed national pricing will include:

Effective planning of renewable energy infrastructure through the upcoming strategic spatial energy plan, to be consulted on and published next year;

National pricing reforms, such as making transmission network use of service (TNUoS) charges more effective and predictable, and taking relevant powers through Parliament to do so;

Improving the operation of flexibility and balancing markets through working with Ofgem and NESO, that will help to reduce the need for constraint payments, which are ultimately paid for by consumers.

Later this year we will publish a reformed national pricing delivery plan, focused on design and delivery and giving market participants and investors clarity on next steps for delivering these reforms. We will also publish the final REMA analysis later this year.

Reformed national pricing will ensure the benefits of clean power are felt by consumers in every part of the country, while giving businesses the stability and certainty they need to continue investing to upgrade our infrastructure to boost our national energy security, create tens of thousands of jobs and grow the economy.

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