SKY-high electricity prices could be cut dramatically for the Scottish glass manufacturing sector if zonal pricing is introduced, a fresh report has found.
New independent analysis by FTI Consulting, commissioned by Octopus Energy, has revealed zonal pricing could slash industrial electricity in Scotland by almost £20 million.
This could create a lifeline for the glass industry, Octopus says, which currently pays some of the highest electricity costs in the world.
Zonal pricing would split the UK into price regions based on local supply and demand.
Greg Jackson (below), CEO of Octopus Energy, said: “Britain’s manufacturers are being crushed by electricity costs – among the highest in the world.
“We’ve now got clear evidence that zonal pricing will cut these costs at the source, without pushing the burden onto households.
“Instead of robbing Peter to pay Paul, zonal pricing can slash bills for heavy industry and households, whilst accelerating our path to clean energy.”
This levy currently adds up to £410 million onto consumer bills, Octopus Energy said, and is expected to become 2.5 times more expensive by the 2030s.
Octopus Energy said zonal pricing would make the energy system more efficient, saving manufacturers that don’t receive the Supercharger £12-16 megawatt-hours (MWh) on average by 2030, with businesses in the North of Scotland saving up to £29 per megawatt-hour.
This could save individual businesses millions each year, with thousands of energy-intensive companies not covered by the Supercharger – such as ceramics, auto and tech sectors – benefitting instantly.
It comes as the House of Lords Industry and Regulator Committee joins Ofgem, NESO, Citizens Advice and other energy experts who have come out in favour of zonal pricing.
Jason Mann, senior managing director at FTI Consulting, said: “Our work for Octopus on zonal pricing shows that zonal pricing could materially benefit all British consumers. This is true for households as well as larger industrial consumers.
“Our most recent study indicates that, with minor changes to the special arrangements that currently apply, all of the country’s very largest manufacturing plants could also benefit from lower electricity prices were zonal pricing to be implemented.”
