Bosses of Octopus Energy and SSE clash over ‘postcode pricing’ proposals
The head of Britain’s biggest energy supplier has claimed his competitors oppose proposals for so-called postcode pricing because they financially benefit from the current system.
Octopus Energy chief executive Greg Jackson told Sky News his business’s rivals were against customers being charged based on where they lived, rather than on a national basis, because they would lose out on profits.
He said: “A very small number of companies that today get paid tens of millions, sometimes in a single day, to turn off wind farms and generate gas elsewhere, don’t like it.
“The reason you’re seeing that kind of behaviour from the rivals is they are benefiting from the current system that’s generating incredible profitability.”
The government is currently considering whether to introduce the policy, which is also known as zonal pricing. Energy secretary Ed Miliband is expected to make a decision on the proposals by this summer.
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Octopus has become Britain’s biggest supplier with more than seven million customers.
Mr Jackson has been a vocal proponent, as he said he wants to charge customers less and boost government electrification policies by having cheaper electricity costs.
What is postcode pricing?
Zonal pricing would mean electricity bills are based on what region you live in.
Some parts of Britain, like northern Scotland, are home to huge energy producers in the form of offshore wind farms.
But rather than feeding electricity to local homes and businesses, power goes into a nationwide auction and is bought to go across Britain.
As the energy grid is still wired for the old coal-producing sites rather than the modern renewable generators, it’s not straightforward to get electricity from where it’s increasingly produced to the places people live and work.
That leads to traffic jams on the grid, blocking paid-for electricity moving to where it’s needed and a system where producers can be paid a second time, to power down, and other suppliers, often gas plants, are paid to meet the shortfall.
Zonal pricing is designed to prevent paying the generators for power that can’t be used.
It would mean those in Scotland have lower wholesale energy costs while those in the south, where there is less renewable energy production, would have higher wholesale costs.
Whether bills go up or down depends on implementation.
Savings from one region could be spread across Britain, lowering bills across the board.
Mr Miliband has said he’s not going to decide to raise prices.
However, SSE’s chief executive Alistair Phillips-Davies described the policy as a “distraction” and said it could affect already agreed-upon upgrades of the national grid that will lower costs.
“I think you’ve got a very, very small number of people who are asking for this. It’s just a distraction. We should remove it now,” he said.
While Octopus Energy estimates that said postcode pricing could be introduced in two to four years, Mr Phillips-Davies said it could take until 2032 before it was implemented, by which time Britain would have “built much of the networks that are required to get the energy from these places down into the homes and businesses that actually need it”.
“We just need to stay true to the course,” he added.
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Unions, as well as industry and energy representatives, have also spoken out against the policy. Opponents include eco-tycoon Dale Vince and trade body UK Steel.
A joint letter signed by SSE, UK Steel, Ceramics UK and British Glass, along with the unions GMB, Unite and Unison, said zonal pricing could lead to scaled-back investment due to uncertainty and higher bills.
A separate letter signed by 55 investors, including Centrica and the Ontario Teachers’ Pension Plan, has also criticised the policy.
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Businesses facing fresh energy cost threat
However, Mr Jackson said many investors had not voiced opposition, with thousands of small and medium businesses instead backing the policy in the hope of paying less on energy bills.
The UK-US trade deal has been signed and is “done”, US President Donald Trump has said as he met Sir Keir Starmer at the G7 summit.
The US president told reporters: “We signed it, and it’s done. It’s a fair deal for both. It’ll produce a lot of jobs, a lot of income.”
As Mr Trump and his British counterpart exited a mountain lodge in the Canadian Rockies where the summit is being held, the US president held up a physical copy of the trade agreement to show reporters.
Several leaves of paper fell from the binding, and Mr Starmer quickly bent down to pick them up, saying: “A very important document.”
President Donald Trump drops papers as he meets with Britain’s Prime Minister Keir Starmer in Kananaskis, Canada. Pic: AP
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Sir Keir Starmer hastily collects the signed executive order documents from the ground and hands them back to the US president.
Sir Keir said the document “implements” the deal to cut tariffs on cars and aerospace, adding: “So this is a very good day for both of our countries – a real sign of strength.”
Mr Trump added that the UK was “very well protected” against any future tariffs, saying: “You know why? Because I like them”.
However, he did not say whether levies on British steel exports to the US would be set to 0%, saying “we’re gonna let you have that information in a little while”.
Sir Keir Starmer picks up paper from the UK-US trade deal after Donald Trump dropped it at the G7 summit. Pic: Reuters
Mr Trump also praised Sir Keir as a “great” prime minister, adding: “We’ve been talking about this deal for six years, and he’s done what they haven’t been able to do.”
He added: “We’re very longtime partners and allies and friends and we’ve become friends in a short period of time.
“He’s slightly more liberal than me to put it mildly… but we get along.”
Sir Keir added that “we make it work”.
The US president appeared to mistakenly refer to a “trade agreement with the European Union” at one point as he stood alongside the British prime minister.
Mr Trump announced his “Liberation Day” tariffs on countries in April. At the time, he announced 10% “reciprocal” rates on all UK exports – as well as separately announced 25% levies on cars and steel.
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In a joint televised phone call in May, Sir Keir and Mr Trump announced the UK and US had agreed on a trade deal – but added the details were being finalised.
Ahead of the G7 summit, the prime minister said he would meet Mr Trump for “one-on-one” talks, and added the agreement “really matters for the vital sectors that are safeguarded under our deal, and we’ve got to implement that”.
Poundland will halt rent payments at hundreds of its shops if a restructuring of the ailing discount retailer is approved by creditors later this summer.
Sky News has learnt that Poundland’s new owner, the investment firm Gordon Brothers, is proposing to halt all rent payments at so-called Category C shops across the country.
According to a letter sent to creditors in the last few days, roughly 250 shops have been classed as Category C sites, with rent payments “reduced to nil”.
Poundland will have the right to terminate leases with 30 days’ notice at roughly 70 of these loss-making stores – classed as C2 – after the restructuring plan is approved, and with 60 days’ notice at about 180 more C2 sites.
The plan also raises the prospect of landlords activating break clauses in their contracts at the earliest possible opportunity if they can secure alternative retail tenants.
In addition to the zero-rent proposal, hundreds of Poundland’s stores would see rent payments reduced by between 15% and 75% if the restructuring plan is approved.
The document leaves open the question of how many shops will ultimately close under its new owners.
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A convening hearing has been scheduled for next month, while a sanction hearing, at which creditors will vote on the plan, is due to occur on or around August 26, according to one source.
The discounter was sold last week for a nominal sum to Gordon Brothers, the former owner of Laura Ashley, amid mounting losses suffered by its Warsaw-listed owner, Pepco Group.
Poundland declined to comment.
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