The UK government has officially dropped plans for zonal electricity pricing as part of its Review of Electricity Market Arrangements (REMA), a move welcomed by the domestic steel industry.
Secretary of State Ed Miliband confirmed the decision, citing the need to protect the security and competitiveness of the UK steel sector. The reversal comes after sustained lobbying from UK Steel, the country’s leading industry trade association.
According to UK Steel:
-
If implemented, the zonal pricing model could have increased industrial electricity bills by over 10%
-
The UK steel sector already pays up to 50% more for electricity than competitors in Germany and France
-
Such a cost hike would have jeopardized jobs, future investment, and critical decarbonization efforts
UK Steel strongly opposed the proposal, highlighting the lack of impact assessments, protective mechanisms, and a comprehensive cost-benefit analysis. It also warned that many steel plants are located on legacy industrial sites—chosen for proximity to materials and transport hubs—making them particularly vulnerable to regional electricity cost disparities.
The government's decision is seen as a win for UK industry, preserving the viability of domestic steel production while broader reforms to the energy market continue.
VietnamSteel by Hoa Sen Group
