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The Hydro Benefit Replacement Scheme 2025 Statutory Review
17 November 2025
Type
Written Ministerial Statement
Department
Department for Energy Security and Net Zero
At a Glance
Issue Summary
This statement addresses the statutory review of the Hydro Benefit Replacement Scheme and the Common Tariff Obligation, which are designed to protect consumers in the North of Scotland from high electricity distribution costs.
Action Requested
The Government has concluded that the schemes should be retained in their current form after reviewing them through engagement with delivery partners and analysis. There is no proposed change or new action beyond maintaining the status quo.
Key Facts
- The Hydro Benefit Replacement Scheme provides an annual cross-subsidy of £112m for 2024/25.
- This subsidy will reduce electricity distribution charges by around £70 per household in 2025/26.
- The Common Tariff Obligation ensures domestic consumers are not charged different prices based on their location within the North of Scotland region.
- Electricity network charges are split into high voltage transmission and low-voltage distribution networks, with higher costs for maintenance in sparsely populated regions like the North of Scotland.
- There is a statutory requirement to review the Hydro Benefit Replacement Scheme every three years.
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