The government has confirmed reforms to the national electricity pricing market, which will not include a zonal pricing strategy for energy.
Instead, it will look to upgrade the network to allow a better flow of power from wind farms in remote regions to more populous areas.
The Department for Energy Security and Net Zero announcement said the UK will retain a single national wholesale electricity price, while the government will work with Ofgem to review transmission charges in a way to "support generation near demand centres and reduce price volatility for investors".
The National Energy System Operator (NESO) will publish a 'strategic spatial energy plan' this year to set out how to deploy new energy infrastructure across the country over the next two and a half decades.
Independent advice from NESO shows that up to £4 billion in constraint payments were made to power companies to reduce output when grid capacity limits, and could be avoided by 2030 if network upgrades are accelerated.
Some of these projects are in the process of being developed.
This includes the Norwich to Tilbury transmission line, where construction is expected to begin in 2027 and electricity is expected to flow by 2030 for National Grid PLC's (LSE:NG.).
The FTSE 100 group's Sea Link offshore cable between Kent and Suffolk is also in train, with consultation closing this month, and a decision to go ahead expected later next year.
Additional consultations are also planned to explore new options for reducing grid constraints, including the use of small-scale assets like battery storage.