UK Trends and Developments Contributed by: Andrea Stauber, Martina Antosova, Medhavi Singh and Sadyant Sasiprabhu, King & Spalding International LLP
Introduction: The UK’s Energy Transition at a Pivotal Juncture The United Kingdom’s energy sector entered 2026 in the midst of profound and accelerating transformation. Following Labour’s landslide election victory in July 2024, the new government moved swiftly to translate its pre-election commitment to making Britain a “clean energy superpower by 2030” into concrete legislative, regulatory and investment action. The pace of change has been unprecedented. Within 18 months of taking office, the government: • passed the Great British Energy Act; • concluded the long-running Review of Electricity Market Arrangements (REMA); • secured a final investment decision for Sizewell C nuclear power station; • selected a preferred partner for small modular reactors (SMRs); • enacted landmark planning reforms; and • reformed the national grid connection process from its foundations. The UK has simultaneously reached record levels of offshore wind procurement and launched construction on its first commercial-scale carbon capture, utilisa- tion and storage (CCUS) infrastructure. The macroeconomic and geopolitical backdrop against which these developments have unfolded remains deeply challenging. Russia’s continuing war in Ukraine and the expiry on 1 January 2025 of the transit agreement for Russian gas via Ukraine to the EU have already tightened European gas markets and laid bare the fragility of the continent’s energy sup- ply chains. Those pressures have been compounded significantly by the outbreak of the US-Israel-Iran war and, critically, the closure of the Strait of Hormuz – through which approximately one fifth of the world’s oil supply and a substantial share of global liquefied natural gas trade ordinarily passes. For Europe, the consequences have been acute and energy security has moved to the centre of political and economic decision-making across the continent. The govern- ment faces a persistent and intensifying tension between the long-term imperative to decarbonise and the short-term pressure to protect consumers from the costs of successive waves of market disruption. It
is against this backdrop of compounding volatility that the case for accelerating the clean energy transition has never been more compelling. This chapter of the guide will examine the evolution of the UK’s net zero policy in recent years, including the key legislative and regulatory developments that will shape the sector in the year ahead, before setting out the main features of the four key pillars of the UK’s clean energy transition: • wind; • CCUS and hydrogen; • nuclear; and • solar. Evolution of the UK’s Net Zero Policy in Recent Years The global energy crisis, which began to unfold in the autumn of 2021, had an immediate impact on house- holds, businesses and energy policy in the UK. An unprecedented increase in gas and electricity prices during the COVID-19 pandemic was then escalated by the Russian invasion of Ukraine in February 2022. In response to the Russian invasion, in April 2022, the UK government committed to ending imports of oil and coal from Russia by the end of 2022 and legislat- ed to ban Russian gas in October 2022. On 1 January 2025, the flow of Russian gas via Ukraine to the EU ceased following the end of a transport agreement. This further challenged Europe’s energy market, which has continued to grapple with an energy crisis and reached its lowest levels of gas storage in approxi- mately seven years at the end of 2024. These pres- sures have been further exacerbated by the outbreak of the US-Israel-Iran war in February 2026, which has placed additional strain on an already challenged European energy market. The UK was the first major economy to enshrine its target of net zero carbon emissions by 2050 in law. However, there has been concern among many that the UK government’s net zero policies did not go far enough to allow the UK to meet that target and relied too heavily on private investment.
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