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Investing.com -- The UK government has confirmed it will retain the national power price system and not move to a zonal pricing model, removing uncertainty for companies like SSE (LON:SSE) and Greencoat UKW.
The government stated that reforming the system while maintaining a single national wholesale price is the best approach for delivering a fair, affordable, secure, and efficient electricity system.
As part of the reformed national package, the government announced several key components.
A Strategic Spatial Energy Plan will be published next year by NESO following consultation.
This plan will outline how to distribute new energy projects across the UK through 2050, with aims to accelerate development, reduce grid connection waiting times, and lower costs.
The government will also collaborate with Ofgem to review transmission charges, creating stronger incentives for investors to build generation in needed locations.
Changes will make existing charges more predictable for investors, addressing the current year-to-year variations that create uncertainty during long-term projects.
To improve power system efficiency, the government is working with NESO on a consultation later this year regarding further reforms to reduce constraint payments.
One potential measure could provide NESO better access to smaller assets like battery storage sites, offering greater flexibility for grid balancing.
NESO is also exploring additional options with industry partners to further reduce constraint payment needs.
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