United Kingdom's Energy Strategy in 2025: Emphasis on Repowering and Ethical Energy Supply Networks
The UK's energy market is set for significant changes in the coming years, as outlined by Ofgem in its Forward Work Programme 2024-25, published on March 28, 2024. The strategic priorities focus on delivering a fair, affordable, secure, and efficient electricity system that supports the transition to clean energy and net zero goals [1].
Ofgem aims to retain a single national Great Britain-wide wholesale electricity market, with ambitious reforms to improve system efficiency. The organisation also seeks to support investment certainty and ensure electricity generation delivers the best value to consumers. This includes collaboration with the government and the National Energy System Operator (NESO) to implement a more coordinated and strategically planned electricity system [1].
The government and Ofgem are also advancing reforms centered around the Strategic Spatial Energy Plan, which will guide the optimal distribution of new energy infrastructure across land and sea to 2050. This plan aims to speed up development, reduce grid connection wait times, lower costs, and give investors confidence, ultimately helping to bring down energy bills [2].
Ofgem is also prioritising the effective delivery and adaptation of the energy price cap to support consumers in the retail market amidst these systemic changes [3]. Together, these strategic priorities underpin a national approach to significantly boost clean, homegrown power, enhancing energy security and affordability while enabling economic growth and meeting climate commitments by 2030 and beyond [1][2].
Meanwhile, the Council of the European Union has reached an agreement on a specific version of the Corporate Sustainability Due Diligence Directive, a directive related to corporate sustainability [4]. However, the agreement has been described as a watered-down version of the original directive [5]. A recently published update provides details about the agreed-upon watered-down version [6].
In the realm of green energy asset management, it's crucial to note that a large proportion of the silicon needed for solar panels is produced in China [7]. Ethical supply chains have been an issue for asset managers for many years, and this information regarding China's role in solar panel production is relevant to green energy asset managers [8].
On a separate note, the market for construction insurance is currently perceived as "hard", with premiums increasing and insurers taking a tougher approach to claims handling. Green energy asset managers need to be aware of these challenges [9].
Lastly, the Rt Hon. Lord Andrew Adonis, Labour member of the House of Lords and the founding chair of the National Infrastructure Commission (NIC), will speak at an upcoming seminar on the future of infrastructure, titled "The Future of Infrastructure", hosted by our firm on May 22 [10].
[1] Ofgem (2024). Forward Work Programme 2024-25. Ofgem. Available at: https://www.ofgem.gov.uk/publications/forward-work-programme-2024-25
[2] Department for Business, Energy & Industrial Strategy (2024). Strategic Spatial Energy Plan. Department for Business, Energy & Industrial Strategy. Available at: https://www.gov.uk/government/publications/strategic-spatial-energy-plan
[3] Ofgem (2024). Energy Price Cap. Ofgem. Available at: https://www.ofgem.gov.uk/consumers/household-gas-and-electricity-guide/energy-price-cap
[4] European Commission (2024). Corporate Sustainability Due Diligence Directive. European Commission. Available at: https://ec.europa.eu/info/strategy/priorities-2020-2024/europe-green-deal/business-industry-and-investments/corporate-sustainability-due-diligence_en
[5] Financial Times (2024). EU agrees watered-down corporate due diligence law. Financial Times. Available at: https://www.ft.com/content/4d7c718d-6a21-462d-a18b-c367683178c8
[6] European Commission (2024). Update on the Corporate Sustainability Due Diligence Directive. European Commission. Available at: https://ec.europa.eu/info/publications/update-corporate-sustainability-due-diligence-directive_en
[7] International Renewable Energy Agency (2023). Polysilicon Market Report 2023. International Renewable Energy Agency. Available at: https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2023/Mar/IRENA_Polysilicon_Market_Report_2023.pdf
[8] Financial Times (2023). Solar power: The supply chain challenge. Financial Times. Available at: https://www.ft.com/content/f66f6498-25d6-411e-836a-76d390d86013
[9] Global Reinsurance (2023). Construction insurance market remains hard for contractors. Global Reinsurance. Available at: https://www.globalreinsurance.com/construction/construction-insurance-market-remains-hard-for-contractors/279355.article
[10] Our Firm Name (2024). The Future of Infrastructure. Our Firm Name. Available at: https://www.ourfirmname.com/events/the-future-of-infrastructure
- As the UK gears towards a clean energy future, Ofgem is simultaneously focusing on the effective delivery and adaptation of the energy price cap in the retail market, an initiative that falls under the realm of finance and lifestyle, aiming to support consumers amidst these systemic changes.
- In the intersecting fields of technology, education-and-self-development, and infrastructure, Lord Andrew Adonis, a prominent figure, will speak at an upcoming seminar on "The Future of Infrastructure". His insights could potentially drive advancements in these areas.
