RenewableUK and other trade groups have backed a letter warning the Government that electricity zonal pricing would put investment at risk and push electricity bills up in parts of the UK.
Under such a scheme, which is under consideration by ministers, the UK would be divided up into different zones, and consumers would pay different rates for the same amount of electricity, creating a “postcode lottery” for billpayers.
Households and businesses in England and Wales would be hit the hardest under the proposals.
The letter to the Energy Secretary Ed Miliband and the Business and Trade Secretary Jonathan Reynolds has been signed by a range of trade associations, including energy intensive users, and trade unions.
Jane Cooper, Deputy CEO of RenewableUK, said: “The reality is that introducing regional or zonal electricity pricing is likely to lead to higher bills for households and businesses in parts of England and Wales, as well as disrupting new investment in clean energy.
“It’s hard to see how the Government could succeed in delivering clean power by 2030 whilst also introducing this complex and controversial scheme.
“The uncertainty and risks created by zonal pricing would be priced in by developers bidding into clean energy auctions and would drive up the cost of building vital new projects, potentially stalling development.
“This would be particularly acute over the next few years, at the very time when we need to secure billions of pounds of investment and maximise the amount of new clean energy capacity we secure to strengthen the UK’s energy security.”