ScottishPower boss Keith Anderson has come out firmly against regional electricity pricing, saying it would result in extreme swings in prices and deter investment.

Octopus Energy is among backers of the plan to replace Britain’s national wholesale electricity price with seven regional zones.

Supporters of localised pricing claim it would make the system more efficient and enable those living near wind farms to be offered cheaper power.

Octopus has joined those in Scotland calling for the system to be introduced so that the country benefits from being a major source of wind energy.

The Department for Energy Security and Net Zero said it is considering reforms to Britain’s electricity market arrangements, to ensure they focus on protecting bill payers and encourage investment.

Mr Anderson, chief executive of ScottishPower, said: “Some people are running around trying to get support for locational pricing by saying, ‘You’ll get free electricity’. None of it is free, it just means somebody is paying more somewhere else.”

He told The Times: “Wind output in Scotland in January was phenomenally low. What happens then? Do you really want to implement a system where one month somebody’s energy bill is zero, and the next month their energy bill is twice what it used to be?

“You need to make sure you don’t end up with extremes; if you end up with extremes, people will look at it and say, ‘This is unbelievably unfair’.”

He said it was “not rational” to propose such a radical overhaul of the wholesale market while also attempting to deliver “the biggest investment in the energy system in the entire history of the UK” to meet the government’s 2030 clean power target.

“Having a discussion about changing the entire trading arrangements for the market is not a great signal to investors if you want them to invest £40 billion in the future of the system every year,” he warned. “I cannot think of a worse time to try to do that.” He said the debate should be taken off the table for five or six years.

Proponents of regional pricing suggest it would encourage power plant developers to build projects closer to demand centres, and encourage big energy users like data centres to build closer to abundant sources of power.

Anderson argued this was “nonsense” because customers were not necessarily in areas with free land and wind speeds. Data centres wanted to be in the southeast of England because of faster communications links, he said.