Making Britain a clean energy superpower, through delivering clean power by 2030 and accelerating the path to net zero, is one of the UK Government's five missions and a milestone in the Prime Minister's Plan for Change.
The UK Government has heralded "a new era of clean electricity", which requires "the most ambitious reforms to our energy system in a generation". A wave of new policies, plans, consultations and responses has been published in the past few months seeking to work towards these goals.
2025 will be a key year for investors in GB power projects and infrastructure, with investment needed now (and £40 billion of mostly private investment expected to be needed each year) to achieve the Government's clean energy goals in 2030 and beyond. We will be publishing a series of articles looking at what the key changes are, how they fit together and what they mean for investors in GB power assets.
We will shed light on the following topics:
- Strategic planning of the energy system – the Government and the newly formed National Energy System Operator (NESO) are taking on new leading roles in planning the country's energy needs. What are the different strategic plans that have been proposed and what impact will they have on investors?
- Improving connections – delays in connecting to the electricity grid are a major blocker to new projects, with grid connections being offered in the late 2030s and beyond. The proposed Connection Reform due to be implemented in Q2 2025 will fundamentally change the process under which grid connections are offered and will involve a re-ordering of the existing connections queue. How will the new process work and what requirements will projects need to meet to obtain grid connections? The necessary upgrading of GB's electricity grid to accommodate new generation and demand will also bring opportunities to invest in new asset classes, such as Competitively Appointed Transmission Operators (CATOs). What is the model for the first CATO tenders expected to look like?
- Market reform – what is the current status of the Review of Electricity Market Arrangements (REMA) process? Which options are still on the table and when can investors expect more clarity on what the future investment landscape will look like?
- Decarbonising baseload – new Decarbonisation Readiness regulations are expected to come into force in early 2026 requiring new and existing combustion plants in England and Wales to have viable decarbonisation pathways through hydrogen conversation or carbon capture. What are the new requirements? Long duration electricity storage (LDES) is expected to be a new asset class supported by Government to provide longer term flexibility. How is the proposed cap and floor support scheme intended to operate?
- Incentivising and accelerating renewables – an unprecedented volume of renewable generation is expected to be required to meet the Government's targets. What role is Great British Energy expected to play and what changes are in store for Contracts for Difference (CfDs), the main support mechanism for GB's renewable generation?
If you would like to explore what these changes will mean for your project, please contact us.
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The articles published on this website, current at the dates of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action.