THE UK Government’s plan to introduce zonal pricing for electricity could harm Scotland’s renewable industry, according to one expert.

On Tuesday, Energy Security and Net Zero Secretary Claire Coutinho set out proposals to shift to zonal pricing for electricity.

Under such a system consumers would pay differing rates depending upon which region they live in.

Those who live closer to electricity generating assets, such as windfarms, would pay less than those within regions without as much generating infrastructure.

The chief executive of energy company Octopus Energy, Greg Jackson, said zonal pricing could result in Scotland having some of the lowest electricity prices in Europe.

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However, Dr Geoffrey Wood (below), a lecturer in energy and environmental law at the University of Stirling, warned that zonal pricing could make Scotland a less attractive place to invest in renewable energy.

“The rationale behind zonal or locational pricing is you’re trying to encourage the deployment of renewables closer to the demand centres for electricity,” he told The National.

“In a fossil fuel energy system you could build relatively few power stations and locate them close to population centres.

“However, with renewables you don’t build the infrastructure where it’s convenient. You build it based upon where that resource is, such as coastal areas or rural mountainous regions when it comes to wind.

“That’s why the majority of the UK’s onshore wind infrastructure is in Scotland.

The National: Dr Geoffrey Wood is an lecturer in energy and environmental law at the University of Stirling Dr Geoffrey Wood is an lecturer in energy and environmental law at the University of Stirling (Image: University of Stirling)

“So, the rationale behind the locational pricing is that, in a perfect world, you’re relocating renewable energy infrastructure closer to where it’s needed, the idea being you need less grid.

“But what that’s going to do is concentrate new renewable developments in places where prices are highest, such as the south east of England.

“If developers are going to get more money for building around London or the southeast, it removes the incentive to build in Scotland.

“In a sense, it disenfranchises the onshore wind sector in Scotland.”

Scottish Renewables – the trade body for the industry in Scotland – has already come out against the proposals for zoning pricing.

Its chief executive Claire Mack said “zonal pricing continues to pose a threat to investment and our ability to deliver cheaper bills to consumers”.

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Wood added that a race to build infrastructure in areas where prices for electricity are highest would also likely result in greater pushback towards renewables themselves.

“You're going to have a lot of renewable schemes going into development and into construction in concentrated areas, which is going to put unprecedented pressures on the planning system,” he said.

“It's also likely to aggravate anti-renewables protesters, who are going to gain support from people who would perhaps not have been opposed to renewable infrastructure, particularly onshore wind, if the turbines weren’t all being built in the same areas.”

Furthermore, Wood said that Jackson’s proposal that businesses such as data centres would flock to the Highlands to take advantage of cheap energy prices ignores pressures such as housing.

He added: “These are communities already in need of additional housing.

The National: An onshore wind farm

“At the moment, they don’t have the sewage infrastructure, the roads, the schools or the medical centres to realistically cope with an influx of new residents.”

According to Wood, the best way for Scotland to benefit from its plentiful renewable electricity generation would be to decouple the price of electricity from the price of gas and aggressively push the creation of more community-based renewables projects.

“I’m a big proponent of Scottish independence because, on a rational level, the UK is ludicrous.

“You can't have a union where one country has 81% of the population and can decide things for the whole country.

“But even putting those politics aside, this measure won’t address the need to optimise the deployment of renewable energy infrastructure.

“It’s a challenge all countries face but once of the threats is what’s called policy or political risk, which is where governments do things which negatively impact on investment.

“Because, without more community-based projects, this really is all about private investment.

“Ultimately, I’d like to see independence for Scotland do its own thing or a more cohesive devolution of powers around energy transition in the different parts of the UK.”