The Review of Electricity Market Arrangements (REMA) continues to evolve. As part of its latest update, the government has confirmed that zonal pricing will no longer be pursued. This proposal – which would have introduced regional pricing signals – was seen as too complex and potentially disruptive for market participants.
Focus now shifts to a reformed national pricing model, and with it, a new phase of planning and design.
A Reformed National Pricing Delivery Plan is due later this year and will provide further detail on the government’s preferred approach. In the meantime, several areas of reform are under active investigation:
- A Strategic Spatial Energy Plan, due from NESO in 2026, which will set out how best to coordinate new energy projects across Great Britain to improve system efficiency
- A review of transmission charges, led by the government and Ofgem, to deliver TNUoS reform by 2029 and ensure charges reflect locational need and investment signals
- Measures to improve system efficiency, including potential updates to the Balancing Mechanism to reduce constraint costs
While changes may take several years to roll out, they will ultimately affect how non-commodity costs are priced, how flexibility is valued, and how suppliers manage risk.
We’ll continue to monitor developments and keep our clients informed. If you’d like to understand how these changes could affect your energy strategy, our team is here to help.