On 10 July 2025 the UK Government announced that it had decided to retain a single national GB-wide wholesale market and introduce a package of reform to improve the efficiency of the future power system, and had therefore chosen not to implement zonal pricing1. The decision was set out in the Review of electricity market arrangements (REMA): Summer update 20251.
"On 10 July 2025, the UK Government announced in its "Review of electricity market arrangements (REMA): Summer update 2025" that it had decided to retain a single national GB -wide wholesale market and introduce a package of reform to improve the efficiency of our future power system and had therefore chosen not to implement zonal pricing."
Zonal pricing would have split the wholesale market into separate price areas, so that wholesale prices differed by location. Under the retained arrangement, a single GB-wide wholesale price continues to apply, with reform delivered through other means. The detail of that reform package has not been reported in the available material1. How the wholesale gas and electricity markets are organised, and the role of the National Energy System Operator in running the system, sit behind this decision.
The announcement covers Great Britain. Northern Ireland operates a separate wholesale arrangement through the Single Electricity Market, described in Energy Supply in Northern Ireland. Generation, network and island connection issues specific to Scotland are covered in Energy Supply in Scotland, and Welsh generation and network matters in Energy Supply in Wales.
The Scottish Government progress report that records the decision also sets out separate heat and skills material, which is not part of the REMA decision. It states that the Clean Heat Market Mechanism started on 1 April 2025 and will run until at least 20291. On public awareness, it reports that 61 per cent of households were aware of renewable power or low or zero carbon heating systems in 2024, up two percentage points on 2022, with awareness of air source heat pumps rising five percentage points over the same period to 35 per cent1. Awareness of biomass boilers fell two percentage points, to 28 per cent1.
| System | 2018 | 2022 | 2024 |
|---|---|---|---|
| Air source heat pump | 18% | 30% | 35% |
| Ground source heat pump | 20% | 27% | 29% |
| Biomass boiler | 32% | 30% | 28% |
| Solar panels for electricity or hot water | 57% | 57% | 59% |
| Any of the systems mentioned | 59% | 59% | 61% |
Source: Scottish Household Survey, as reported in the Heat in Buildings progress report 20251.
Why it matters for households
Wholesale market design feeds through to the prices that suppliers pay for electricity, and therefore to the tariffs households are offered. Retaining one GB-wide wholesale market means locational differences in wholesale cost are not reflected directly in a postcode-based wholesale price, so the reform package rather than zonal pricing is the route by which system efficiency is expected to be pursued1. The practical effect on any individual bill has not been reported1.
For a home's energy independence, the decision concerns where electricity is bought and sold rather than what a household installs. The related material in the same report points to the demand side: fewer than 5 per cent of households reported having a heat pump installed, and cost and lack of interest were the main barriers given to installing one1. High upfront costs, myths and misinformation about low carbon technology, and disruption during installation were identified as the main barriers in Consumer Scotland research published in May, conducted by Changeworks1.
What happens next
The Scottish Government report states that consultation responses are currently being analysed and an update will be published in due course1. Research evaluating the current customer journey in the heat transition will commence in autumn 20251. No further timetable for the REMA reform package has been reported1.