I have a few concerns about the zonal system.
There is subsidies, including those payments mentioned by sols200, it would be a bit controversial, if those were left unchanged whilst localising the benefits of cheaper energy sources. This is especially the cases where the majority of people cant do a lot about their energy sources and are not part of the NIMBY problem.
I see the real issue as national grid problems, as I understand it, its still mostly in the same state as for the older power stations which have been shutting down for decades, with inadequate investment to basically force this Zonal system to come to life as a band aid.
Certain zones on that map have a clear disadvantage, GB5 being the obvious one which used to have local coal stations?, it only has a little bit of coastline, and also has the least wind in the country due to mostly being away from the coast and close to the south east. I think even with investment it would never be as healthy as zones like GB1 which could create a permanent post code lottery on energy costs, these costs affect both cost of living, and cost of business. So this will further distort the economical spread across the country.
Another issue is if this is brought in, I think alongside it there should be a kind of protection legislation brought in alongside, we have seen many times now that "market incentives" often dont work as is ideal, so there should be a legal obligation for all new renewable builds to be in the weakest areas, and then allow in the other areas again once its balanced. I also think there could be an averaging system used as the main benefit of this is it will give suppliers cheaper energy, but there could be a requirement to subsidise costs in more expensive areas from cheaper regions. So e.g. instead of GB1 being 5p kWh all day whilst GB5 is paying 35p all day (with no more cheap off peak either), you could perhaps do 20p in GB1 and 25p in GB5 so there is still an advantage but it isnt so distorted. If this isnt done, at the very least there should be protection that the worst zones can never exceed the cost of what they would have been under the national system, where the subsidy is either from government or the other zones. Although this would still likely trash tariffs like Agile in the worst zones with the protection only on SVR.
I do understand the benefits, although cant help but think there is better potential solutions out there, and this should not be used as an excuse to not fix the grid. In other sectors there is a lot of region subsidy to prevent massive distortions of costs, such as broadband and food.