11/05/2026
Welcome to our May Energy Matters Newsletter
The energy sector is a rapidly changing market with daily updates on technological advances, regulatory reviews, policy updates, funding decisions. In each edition of our Energy Matters Newsletter, we aim to provide a user-friendly, summary update of some of the key issues we are seeing across the renewable energy and resource management sectors.
If you would like to discuss any of the issues raised, please contact a member of our energy team.
Stay connected: Follow our Energy & Resource Management showcase page.
Energy Spotlight
De-linking the electricity costs from gas price volatility
The Iraq War reshaped global energy markets by heightening geopolitical risk and reinforcing concerns about the security of oil and gas supply chains. In the immediate term, volatility in crude prices and uncertainty around Middle Eastern production capacity prompted governments and investors to re-evaluate dependence on fossil fuel imports.
In the UK the government has unveiled a new package of policy measures aimed at accelerating the transition to net zero and proposals to “de-link” electricity costs from gas price volatility.
The government is focusing on two main interventions:
- An extension and deepening of the Electricity Generator Levy (EGL windfall tax) with an increase in the marginal tax rate to 55% from 1st July 2026.
- Introducing a Wholesale Contract for Difference (WCfD) contract for legacy renewable generators with a plan to run the first auction in 2027.
A recent analysis by Regen broadly supports this approach arguing that looking at practical measures to deliver lower wholesale prices is better than trying to “split the market” by separating gas power prices from the rest of the wholesale market.
Regen characterises the government’s approach as a “carrot and stick” strategy. The strengthened EGL, with a higher marginal tax rate, would act as a disincentive for generators to remain fully exposed to volatile market prices, while the proposed wholesale CfD scheme offers a more stable, long-term revenue model in exchange for giving up windfall gains. If successful, this could expand the share of generation operating under CfD-style arrangements, effectively shielding consumers from price spikes by stabilising revenues across the system.
Read the full report from Regen.
Heat Networks regulation update
We have continued to see a raft of regulation for heat networks around consumer protection, zoning, installation and maintenance of pipework, and technical standards during 2026.
Initially all operating heat networks have been deemed to be automatically authorised by Ofgem to enable them to continue to operate. However, both Operators and Suppliers will need to comply with the Authorisation Conditions applicable to the services they are providing and are required to register their heat networks with Ofgem by 26 January 2027.
We have produced a suite of free resources on our Points of Connection hub - our knowledge and expertise in district energy to support anyone operating in, or coming into, the sector.
Our recent articles include:
Heat networks – some thoughts on demand assurance
Heat networks: a guide to prepare for registration
The future of heat networks: regulation, zoning and growth in 2026
Street works permits for electric vehicle charge point operators
New guidance recently published by the Department for Transport (DfT), United Kingdom, enables electric vehicle charge point operators (EV CPOs) to utilise a streamlined permit system for street works, replacing traditional, complex Section 50 licenses.
Supported by the Planning and Infrastructure Act 2025, this shift aims to speed up the rollout of public charging infrastructure by treating CPOs similarly to other statutory utility divisions.
EV CPOs may now use the Street Manager digital service platform for improved coordination for EV infrastructure installation.
Where local authorities are in contract with CPOs for EVCP services, or shortly to enter into such arrangements, consideration will need to be given as to how the contract may need to be amended to reflect this updated approach to licensing of charge point installation.
Quick Links
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Energy Sector Reform
Ofgem transformed to strengthen protections for energy consumers
Department for Energy Security and Net Zero 22 April 2026
Billpayers are set to benefit from a stronger energy regulator, under reforms of its remit set out by the government.
Government publishes plans to protect families from energy crisis
Department for Energy Security and Net Zero 21 April 2026
Families across the country will be better protected from energy crises, as government moves to break link between gas and electricity prices.
Government launches fusion energy strategy
Department for Energy Security and Net Zero 16 March 2026
Government sets out its vision for developing a commercial fusion industry in the UK that will deliver skilled jobs, investment and growth.
Ensuring the wholesale market works for customers
Regen 21 April 2026
The government has announced a further package of policy interventions to accelerate the net zero transition and the clean power plan, while providing greater resilience for consumers from future energy shocks.
Electric Vehicle Infrastructure
UK to appeal against tax ruling cutting VAT on public electric car chargers to 5%
Guardian 21 April 2026
HMRC confirms it will fight London tax tribunal’s finding that it has been overcharging for years under the law.
Street works permits for electric vehicle charge point operators
Department for transport 19 March 2026
New guidance enables electric vehicle charge point operators (EV CPOs) to utilise a streamlined permit system for street works, replacing traditional, complex Section 50 licenses.
Hydrogen
ITM Power UK Ltd in South Yorkshire receives £40m investment from Great British Energy
Department for Energy Security and Net Zero 9 April 2026
ITM Power UK Ltd in South Yorkshire has today received £40m investment from Great British Energy alongside a £46.5 million government grant in principle, to deliver a major expansion of hydrogen technology manufacturing in the UK.
Nuclear
Plans to change nuclear system to speed up building and cut costs
Department for Energy Security and Net Zero 13 March 2026
Nuclear projects will be built faster and cheaper, boosting national and energy security and protecting households from volatile global fossil fuel markets as part of a of nuclear regulation.
Solar and Battery
Government to make 'plug-in solar' available within months
Department for Energy Security and Net Zero 24 March 2026
'Plug-in' solar panels to be in shops within months, offering households chance to significantly cut energy bills.
Government approves UK’s largest power-producing solar farm
Department for Energy Security and Net Zero 8 April 2026
The Springwell Solar Farm is set to be the largest power-producing solar farm in the UK – according to the developer it could power over 180,000 homes a year, the equivalent of half the homes in Lincolnshire.
Wind
£64 million for Port Talbot offshore wind hub in the Celtic Sea
Department for Energy Security and Net Zero 26 March 2026
Up to £64 million to back Port Talbot’s development as the first port in the Celtic Sea specifically developed to support floating offshore wind.
New radar systems to unlock offshore wind
Department for Energy Security and Net Zero 20 March 2026
Upgrades to air defence radar systems will help unlock record breaking offshore wind capacity.
Consultation on PDRs for onshore wind turbines in England
Department for Energy Security and Net Zero 18 March 2026
The government is seeking views on several proposals for permitted development rights (PDRs) for onshore wind in England.
District Energy
Heat networks – some thoughts on demand assurance
Bevan Brittan 21 April 2026
Key to the success of heat network zoning is the creation of “demand assurance”. This means establishing an investable environment so that developers and investors can be confident that there will be demand for heat from their heat network, and therefore a guaranteed revenue stream.
Heat networks: a guide to prepare for registration
Bevan Brittan 13 April 2026
From the 27th of January 2026, relevant heat network operators and suppliers are regulated by Ofgem and must comply with the Authorisation Conditions.
The future of heat networks: regulation, zoning and growth in 2026
Bevan Brittan 20 March 2026
We expect to see a raft of regulation around consumer protection, zoning, installation and maintenance of pipework, and technical standards during 2026.
