As a year marked by long-anticipated decisions and significant policy signals draws to a close, Brevia Energy takes a look back at developments and decisions that shaped the UK energy landscape in 2025.
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REMA decision
In July, the Government confirmed it would not proceed with zonal pricing, publishing its Review of Electricity Market Arrangements (REMA) Summer Update. Ministers instead reaffirmed their commitment to a single national wholesale electricity price while continuing to pursue wider market reform. The Government committed to publishing a Reformed National Pricing Delivery Plan and the full REMA analysis later in 2025; however, neither has yet been released.
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DESNZ reshuffle
A September Cabinet reshuffle resulted in significant changes across the Department for Energy Security and Net Zero (DESNZ). Energy Secretary Ed Miliband MP remained in post, despite rumours that the Prime Minister attempted to move him. Minister Michael Shanks MP similarly remained in the Department, with a promotion to Minister of State for Energy.
Three new ministers joined the Department: Katie White MP as Climate Minister, Chris McDonald MP as Industry Minister (jointly with the Department for Business and Trade), and Martin McCluskey MP as Minister for Consumers, replacing Miatta Fahnbulleh MP who moved to the Ministry of Housing, Communities and Local Government.
Changes were also made in the House of Lords. Labour’s long-standing Shadow Energy Minister Alan Whitehead returned to Parliament in November as a DESNZ Lords Minister, with responsibility for biomethane, tidal and geothermal energy, as well as individual planning decisions.
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COP30
Against a backdrop of declining domestic political consensus on net zero, the Prime Minister’s late decision to attend COP30 in Brazil was widely interpreted as a reaffirmation of the Government’s commitment to clean power and international climate leadership.
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Connections queue reform
The Labour Government moved forward on a central energy manifesto commitment by progressing grid connections reforms. [1] In October, the National Energy System Operator (NESO) set out its reform timeline, followed in December by the publication of initial outcomes from Ofgem and NESO, including a reordered connections pipeline totalling 283GW of projects. Under the new framework, Gate 1 projects are expected to connect from 2026/27, with Gate 2 projects scheduled from 2030 onwards.
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Electricity grid decarbonisation
On 23 October, zero-carbon sources accounted for a peak of 93% of electricity generation on the GB grid.[2] By the end of September, Great Britain had recorded 87 hours of fully clean power in 2025, up from 64.5 hours in 2024.[3] While achieving the 2030 target of 95 per cent low-carbon generation remains challenging, progress continues, supported by anticipated connections reform from 2026/27.
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GB Energy FLOW investment
In November, Great British Energy announced its first investment in floating offshore wind, backing the Pentland Floating Offshore Wind Farm alongside the National Wealth Fund and the Scottish National Investment Bank. [4] Each committed up to £50 million. The project is expected to power around 70,000 homes and demonstrates the role of public finance in supporting early-stage technologies and crowding in private investment.
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Nuclear milestones
The nuclear sector recorded several major milestones in 2025. In July, the Government reached a final investment decision on Sizewell C, confirming that it will take an initial 44.9 per cent equity stake and become the project’s largest shareholder.
Progress was also made on new nuclear technologies, with Wylfa selected as the site for the UK’s first small modular reactor and Rolls-Royce named as the preferred SMR bidder in June, signalling the Government’s intent to accelerate deployment of next-generation nuclear capacity.
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AR7 budget concerns
The £1.08 billion budget announced for Allocation Round 7 (AR7) raised concerns within the offshore wind sector.[5] The allocation was significantly lower than AR6’s £1.56 billion, which secured 9.6GW across 128 projects, prompting questions about the achievability of the Government’s 50GW offshore wind target by 2030.
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Energy bill reform
In the Autumn Budget, the Chancellor announced that 75 per cent of Renewables Obligation costs would be removed from consumer energy bills for three years from April 2026 and transferred to general taxation. The Energy Company Obligation levy will also be abolished once the scheme concludes in April 2026, with the aim of reducing household energy bills. While billpayers will see an average reduction of roughly £150, this still leaves the Government a far way off from its £300 energy bill reduction pledge.
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UK–EU ETS linkage
In May, the UK and EU agreed to work towards linking their Emissions Trading Schemes, with implementation potentially from 2027. Linkage would enable cross-market trading of allowances and mutual exemptions from Carbon Border Adjustment Mechanisms (CBAM), potentially saving UK exporters up to £800 million by 2030.
Looking ahead to 2026
Looking ahead to 2026, delivery will be key. The delayed Warm Homes Plan, originally expected in autumn 2025, will be a test of delivery on household decarbonisation and energy affordability, particularly amid reports that its budget may be scaled back.
Results from Allocation Round 7 will be closely scrutinised, both in light of the reduced overall budget and as the first round to extend CfDs to 20 years for offshore wind, onshore wind, remote island wind and solar PV – a reform intended to strengthen investor confidence.
The publication of the first Strategic Spatial Energy Plan will mark a step change in system planning, introducing a GB-wide framework to map the location, scale and mix of electricity and hydrogen generation, storage and networks.
Alongside this, the sector will be watching for the outcome of Ofgem’s ongoing review, which will shape the regulatory environment for investment, infrastructure delivery and consumer outcomes over the remainder of the decade.
Brevia Energy is a dedicated division of Brevia Consulting, and has a longstanding reputation for its expertise and experience in the Energy Sector.
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References
[1] Labour Party Manifesto, 13 June 2024, pp 55, Link
[2] ‘October 2025 Energy Report’, NESO, 6 November 2025, Link
[3] ‘Analysis: Great Britain has run on 100% clean power for record 87 hours in 2025 so far’, Carbon Brief, 29 September 2025, Link
[4] ‘Major floating offshore wind project secures backing from Great British Energy, The National Wealth Fund, and The Scottish National Investment Ban’, Great British Energy, 19 November 2025, Link
[5] ‘Sector slams ‘severely restricting’ AR7 offshore wind budget that threatens 50GW by 2030 target’, New Civil Engineer, 28 October 2025, Link
