Tag: Electric Insights

Britain is building batteries faster than any other part of its power system. Installed capacity has tripled in just three years. Batteries can now discharge more power than the entire nuclear fleet, a sign of how quickly the grid is changing. Since construction of Hinkley Point C began, Britain has installed nearly 7 GW of batteries. Hinkley Point’s 3.2 GW of reactors will not come online until at least 2030 (five years late), whereas new battery projects can be built in a matter of months.

Britain’s battery capacity has risen from 10 MW to nearly 7 GW, overtaking the headline capacity of the entire nuclear fleet in under a decade. The two technologies are not directly comparable, as batteries can only discharge for 1–4 hours before recharging, whereas nuclear reactors provide steady output around the clock.

Britain’s battery boom is impressive, but it must compete in a global race for investment. Storage is growing faster overseas as countries seek flexibility to absorb more wind and solar. Investors follow price signals, and battery revenues shift quickly with market regulations and price spreads. Battery revenues vary by one-quarter from year to year, so today’s hottest market can soon become crowded and less attractive.

Turkey shows how quickly the race can shift. It now has Europe’s largest pipeline of battery projects, beating Germany and Italy combined. This surge reflects a fast-growing power system turning to wind and solar to cut imports. Since 2022, new wind and solar projects have had to add battery capacity equal to their generation capacity.

Britain is taking the opposite approach: rather than mandating battery construction, the market decides how much to build. Tighter co-location or balancing requirements could make wind and solar more compatible with system operations, but could risk stalling investment. The Government is leaning towards market signals, with the Clean Flexibility Roadmap aiming to remove barriers and improve price signals for storage.

Energy storage helps Britain use more of the electricity it generates. Batteries respond to short-term swings in supply and demand within seconds, while pumped hydro provides large reservoirs to deliver electricity during longer periods of system stress. Together, they store surplus wind and solar to cut curtailment, and release it when demand peaks to smooth out prices. 

To support the Clean Power targets, Britain must more than triple its current storage capacity by 2030. After building 5 GW of batteries in the last five years, Britain now has five years to build the next 20 GW. This will rely on investors remaining convinced this is Europe’s best place to build.

Britain left Europe’s shared electricity market back in 2021, yet since Brexit, its power system has become more inter-connected than ever. The Government is now considering a closer relationship with Europe, which should allow our cross-border cables to be used more effectively. With rising demand and variable renewables pressuring the grid, better electricity trading could help to lower bills and strengthen security. 

Cables to Europe have moved from the margins to the centre of our power system. Britain now has 10 interconnectors with 10.3 GW of capacity linking into neighbouring systems. France and Norway are now two of Britain’s largest sources of electricity, supplying 8% and 3% of demand in 2025, respectively. Our links to Belgium, the Netherlands and Denmark are used as two-way trading routes that balance intermittent wind and solar, importing 4% and exporting 2% of our national supply over the year. Finally, three links to Ireland export a further 2%.

These links put Britain in an unexpectedly strong position. The EU asked all member states to build cross-border interconnector capacity equal to at least 10% of their total generating fleet by 2020, rising to 15% by 2030. This year, Europe’s five largest power systems all fell short of the 2020 target. Despite not being bound by EU rules, Britain reached the 10% target, and has now overtaken even the well-connected German power system. This is doubly surprising for an island nation, as subsea cables are twice as expensive to build (per km) as overhead lines.

Britain’s interconnection started expanding rapidly in 2020, with new links to Belgium, Denmark and Norway, plus two new links to France coming online in a few short years. Britain built 5 GW of interconnectors between 2021 and 2023, but since then only 0.5 GW has come online. The NeuConnect link to Germany is currently under construction, but not scheduled for completion until 2028. The lull should be short-lived, as  Britain is due to add more than 1.2 GW per year from 2028 through to 2032 if all approved projects proceed as planned.

Britain overtook Germany to become the most inter-connected large power system in Europe. Interconnection share is measured as the total interconnector capacity relative to total generating capacity. France’s total includes links to Britain.

Building links to other countries is only part of the challenge. Britain also needs more grid capacity to move power within its own borders. Stronger connections are needed to reduce the amount of Scottish wind power wasted to curtailment, to connect new sources of demand like AI data centres, and to support the landing points for major new interconnectors. This will require strategic long-term planning, and a planning system that can deliver clear and timely decisions to build the infrastructure that the power system’s future depends on.

The next question is whether Britain can use those cables more effectively. The UK and EU are exploring closer cooperation, including the possibility of Britain participating in the EU’s internal electricity market once again. This would improve the efficiency of electricity trading, which National Grid estimate has added £1 billion to the cost of power trading since Brexit. Recoupling markets would allow the intuition and forecasts of traders to be replaced by central algorithms, which would  reduce power prices in Britain.

Britain’s Reformed National Pricing plan could shorten market settlement periods to 15 minutes, aligning with how markets run on the continent. Both sides also plan to link the UK and EU Emissions Trading Schemes, together with abolishing Carbon Price Support from 2028 – an £18 per tonne tax paid only by British fossil-fuelled power stations for CO2 emissions. These changes would align carbon price signals for power generation on both sides of the Channel, reducing distortions in interconnector trade and creating a more level playing field between the markets.

Britain’s interconnectors are now central to operating the power system and setting electricity prices. We can already import up to one third of national electricity demand, so using our links efficiently is becoming as important as building new ones. This must also go hand in hand with more home-grown clean power, as merely swapping our reliance on imported fossil fuels for reliance on imported electricity will not solve Britain’s energy security and energy price challenges. Ultimately, a diverse portfolio is needed, with flexible generation, battery storage, demand response and stronger networks to keep the system reliable as clean power grows.

Britain’s interconnection with neighbouring countries grew rapidly between 2020 and 2025, but is now stalled until new links come online from 2028 onwards.

The first day back to work after the New Year saw Britain’s highest electricity demand in nearly a decade. Widespread snowstorms closed hundreds of schools, as the UK recorded its coldest night of the year with temperatures plunging to -12°C. With heating systems working flat out to keep homes warm, national electricity demand peaked above 50 GW for the first time since 2018. Overall demand across the quarter was 0.7% higher than a year ago, continuing its recent upward trend.

The extra demand was met largely by renewables rather than fossil fuels. A stormy three months gave wind farms their most productive quarter ever, generating 30% more electricity than during the same period last year. For the fourth consecutive quarter, wind power was Britain’s largest source of electricity.

This pushed fossil-fuelled generation down by 16% year-on-year, while electricity exports almost doubled. Only six days during the quarter saw fossil fuels produce more electricity than low-carbon sources. This helped the carbon intensity of electricity fall to an average of 127 g/kWh over the three months to March, its lowest ever level for a first quarter of the year.

Britain’s electricity supply mix in the first quarter of 2026.

Installed capacity and electricity produced by each technology.(1) (2)

(1) Other sources give different values because of the types of plant they consider. For example, Energy Trends records an additional 0.7 GW of hydro, 0.6 GW of biomass and 3 GW of waste-to-energy plants. These plants and their output are not visible to the electricity transmission system and so cannot be reported on here.

(2) We include an estimate of the installed capacity of smaller storage devices which are not monitored by the electricity market operator.

It was a relatively quiet start to the year, with only five of the 168 records we track reaching new highs or lows during the first quarter. The one standout moment was  25 March, when the combined output from Britain’s renewable generators jumped by nearly 4 GW, rising from a previous peak of 31.7 GW to 35.6 GW. The same day also saw low-carbon sources produce more than 40 GW for the first time. Together, Britain’s nuclear, biomass, wind, solar and hydro also had their most productive ever month in February, averaging more than 25 GW.

The tables below look over the past seventeen years and report the record instantaneous output and share of electricity generation, plus sustained averages over a day, a month, and a calendar year. Cells highlighted in blue are records that were broken in the first quarter of 2026. Each number links to the date it occurred on the Electric Insights website, so these records can be explored visually.

(3) Note that Britain has no inter-seasonal electricity storage, so we only report on half-hourly and daily records. Elexon and National Grid only report the output of large pumped hydro storage plants. The operation of battery, flywheel and other storage sites is not publicly available.

After twenty years of decline, Britain’s electricity demand has turned a corner and is on the rise. Growing numbers of electric vehicles and heat pumps are the main driver, so this arguably marks the next phase of the energy transition: using clean electricity to decarbonise transport and heat. Demand is also poised to surge because of our growing appetite for AI, and the huge data centres it relies on.

Despite rising demand, renewables supplied a larger share of electricity than ever. Output from solar, wind and biomass rose by more than enough to meet the country’s additional demand. Alongside 2025 being the UK’s hottest ever year, it was also the sunniest since records began, helping solar power to produce one-third more electricity than last year. Record renewables meant record system pain, with balancing costs and wind curtailment costs reaching new highs, and the debate about ‘wasted wind power’ looming large. These challenges will continue to grow in importance, as the next CfD auction (AR7) awarded contracts to a record 8.2 GW of offshore wind. This is enough to put wind back on track with Government targets, but also enough to strain the grid even further.

The cost of energy continues to be a major challenge, with Britain’s electricity bills among the highest in the world. Ofgem’s latest price cap, which covers January to April, impacts this by raising electricity prices further while gas prices fall. This works against the country’s clean energy ambitions, penalising electric vehicle and heat pump owners. We look at the ‘spark gap’, the ratio of electricity to gas price, which reflects how costly it is to electrify heat relative to sticking with fossil fuels. Britain ranks worst in our international league table, with the highest spark gap of any major country.

Global, interconnected fossil fuel markets are a key driver for our energy prices. Recently, markets have been unsettled by the US military intervention in Venezuela and unrest in Iran amid a security crackdown. In the longer term, analysts expect both oil and gas markets to see large over-supply this year, which could ease pressure on bills, but risks pushing up emissions around the world.

The Government has set three Clean Power 2030 targets, covering the amount of clean electricity produced and overall carbon intensity. Progress towards these has been solid over the past 16 years, but clean electricity’s share has stalled over the last four quarters, along with carbon emissions intensity.

Britain’s electricity demand has reached a turning point, seeing two consecutive years of growth for the first time in over 20 years. Since its peak in 2005, demand has fallen by more than a fifth – often seen as a sign of wider decline, deindustrialisation and outsourcing. Now with Artificial Intelligence poised to reshape the economy, the data centres which power AI models have contributed to raising Britain’s electricity demand by 1.7% in 2025.

AI presents a major growth opportunity, expected to boost UK GDP by £550 billion over the coming decade. Behind the rapid increase in AI assistants are data centres: huge and power-hungry computer clusters concentrated around London. They currently consume 2.5% of Britain’s electricity, more than the city of Birmingham.

Britain’s electricity demand is also being driven upwards by electrifying transport and heat. Electric vehicle sales grew by 27% to reach 475,000 pure-battery vehicles plus 225,000 plug-in hybrids, meaning one in three cars sold in 2025 was electric. Heat pump sales grew more modestly, by just 4%, held back by Britain’s high electricity prices.

Data centres are growing much faster, already consuming 5% of national demand in the US, and 20% of Ireland’s electricity. This is wreaking havoc on electricity systems: American firms are scrambling to build polluting diesel and gas generators to meet growing demand, and Ireland placed a three-year ban on new data centres to protect consumers.

To sidestep these problems, the Government launched five AI growth zones: areas with good grid connections, clean firm generation sources, and proximity to cities. Yet, with UK data centre demand forecast to quadruple by 2030, more zones are likely to be needed to keep pace and avoid stretching the grid thin.

Britain’s electricity demand has gone from falling faster than in any other major country, to now being middle of the pack. Britain’s turnaround is set to accelerate, as the CCC targets rapid rises in heat pump installations and electric car sales. Building all-new infrastructure to power these new loads will be prohibitively expensive, but planning ahead to use off-peak hours and better utilise existing infrastructure around the country will help to avoid the grid from holding back progress.

Electrification is central to decarbonising Britain’s homes and cars. But this raises the bar for the power system, which must produce more electricity while making it cleaner. In 2025, renewables did exactly that. Output from wind, solar and biomass all reached record highs, growing faster than demand. For the first time, clean sources supplied more than three-fifths of Britain’s electricity, up from just one-fifth in 2010.

Solar power had an outstanding year, with output 35% higher than in 2024. New installations surged as Britain basked in record sunshine. A quarter of a million homes installed PV in 2025, helping to push capacity up by 2.6 GW; the equivalent to two large power stations. The UK also enjoyed its sunniest year on record, with over 360 more sunshine hours than in 2024.

More wind and solar output cuts emissions and improves energy security, but puts greater strain on system operations. The cost of balancing supply and demand leapt by more than 20% to £14 per MWh – adding one-fifth onto generation costs. Much of this is down to the record cost of curtailing wind farms (£1.5bn in 2025), which continues to fuel debate about where new wind farms are built and how they should be supported.

Spiralling ancillary service costs points to the need for flexible and controllable clean power sources. Biomass also had a record year with output up 5%, but nuclear output slumped by more than a tenth to its lowest level since 1980. Britain’s nuclear fleet suffered prolonged maintenance outages, alongside refuelling and unplanned shutdowns.

The focus is shifting from building clean power to orchestrating a clean system. Curtailment, congestion, and balancing are becoming as important as generation records. System flexibility will determine whether more clean output translates into lower bills and lower emissions. If grid upgrades lag behind, curtailment will continue. Battery storage is Britain’s fastest growing source of flexibility and arguably the quickest route to turning wasted wind into delivered electricity. As gas power is phased down and nuclear stations reach retirement age, we will increasingly need technologies that can deliver clean power on demand, not only when the weather cooperates.

Britain’s renewables supplied all the growth in electricity demand in 2025, even compensating for the drop in nuclear
output. Three renewable energy sources supplied record amounts of electricity.

Britain’s energy prices are fighting against its net zero ambitions. Using electricity to replace oil and gas is the biggest opportunity to reduce emissions and improve energy security. But instead, the people switching to electric vehicles and heat pumps are increasingly being punished with higher bills. Ofgem’s latest price cap pushed household electricity prices up by 5%, while cutting gas bills by 6%. This has made switching to clean electricity a bad deal for British households.

The ratio between electricity and gas prices, known as the spark gap, is now higher in Britain than any other large country. This means a modern heat pump which converts 1 unit of electricity into 4 units of heat would be more expensive to run than a standard gas boiler, despite producing 85% less CO2¹. The same heat pump in France or the US would cost half as much as gas to run – which helps to explain why the UK lags behind in heat pump uptake. Heat pumps are the Government’s main approach to decarbonising buildings, but with 85% of UK homes still heated by gas, the fundamental economics need to change.

Why is Britain’s spark gap so high?

Ever since Britain has had an electricity market, its spark gap has ranged from around 3.5 to 5 – always at the top end of the 25 major countries compared below. Two factors drive this: gas is relatively cheap for British households, and electricity is relatively expensive.

In the 1990s, the UK had low gas prices thanks to abundant supplies from the North Sea and limited capacity to export it. In the 2000s, gas prices rose as production declined, while fierce competition in electricity markets pulled prices down. Britain’s spark gap fell to a low of around 3.3, still higher than in most of the world.

Britain’s spark gap over the last 35 years has remained well above the level in other countries. Electricity for households is now 4.7 times more expensive than gas, giving Britain the highest spark gap out of the 25 major countries compared which provide retail price data. In contrast, the spark gap in France, Japan and the US is around 2, while it is below 1.5 in the Netherlands and Sweden. Data from Ofgem, DESNZ, Eurostat, and IEA.

In the second half of the 2010s, the spark gap rose sharply as decarbonisation policies were funded through electricity-only levies. The feed-in tariffs and Renewables Obligation that supported early renewables, Contracts for Differences that support large-scale projects, and carbon pricing now all push up household electricity bills, but leave gas bills largely unaffected. Other countries share the burden of green policies across both fuels, but in the UK more than 80% of levies are paid through electricity bills, four times more than comes from gas.

How could we lower the spark gap?

The CCC propose to address this imbalance by distributing electricity policy costs more widely, acknowledging the fact that clean electricity is central to decarbonisation. Costs could move into general taxation, which would lower electricity bills but raise taxes elsewhere. Alternatively, they could be shifted from electricity onto gas bills. Even if such a shift did not increase average spending on energy, it would affect individual households differently, creating winners and losers. Given the continuing problems with fuel poverty, any changes must be carefully managed.

Policy changes for domestic customers, scheduled for April 2026, will see three quarters of the Renewables Obligation’s cost move into general taxation, along with an end to the Energy Company Obligation. This is expected to cut electricity prices by 3.4p/kWh and gas prices by 0.3p/ kWh, reducing the spark gap from 4.7 to 4.1. This is an improvement, but still out of line with most of the world.

If Britain’s gas prices rose to the average across European and OECD countries (9.5 p/kWh), electricity prices could fall to 25 p/kWh to maintain the same annual household bill. This would put British prices between those of Poland and Austria, reduce our spark gap to 2.5, and make heat pumps and electric vehicles 30% cheaper to run.

Anything that pushes costs onto gas will be difficult, because it is so widely used for home heating. But if we want to decarbonise our buildings and reduce reliance on imported fuels, we need to stop taxing the solution and start pricing the problem: reducing the spark gap each year. Rebalancing levies so clean electricity is cheaper to use is the fastest way to make heat pumps mainstream.

The price of gas and electricity per unit to residential consumers, including taxes and standing charges. The ratio
of electricity to gas price gives the spark gap, shown by coloured lines. Britain’s electricity is the most expensive
out of the 25 large countries shown, while gas prices are slightly below the average. This gives Britain the highest
spark gap out of all these countries, meaning electricity is penalised most strongly against gas. The dotted grey
line shows a range of other gas and electricity prices that would deliver the same annual bill for the average household. Data from Ofgem, DESNZ, Eurostat, and IEA.

1 With Britain’s average carbon intensity in 2025, a modern heat pump with COP = 4 would emit 30 gCO2 per kWh of heat, compared to 200 g/kWh for a modern 92% efficient gas boiler.

Oil is the world’s largest source of energy, and never far from the news. December and January saw global geopolitics flare up, with major disruptions in Venezuela and Iran. These short-term shocks mask the wider story of ‘demand displacement’. Renewables are displacing gas and coal burnt for electricity while electric vehicles reduce the oil needed for transportation. Looming oversupply of fossil fuels suggests that lower prices could be a prospect for this coming year.

Speed versus stamina

The US is the world’s largest producer of oil and gas. It supplies two-thirds more oil than 2nd ranked Saudia Arabia, and two-thirds more gas than 2nd ranked Russia. Their ‘energy dominance’ was driven by the shale revolution, where hydraulic fracturing – or ‘fracking’ – unlocked vast oil and gas resources trapped inside rock formations. This allowed US fossil fuel supply to rapidly expand, but their remaining reserves are now waning fast.

The ratio between a country’s oil reserves and its production – known as the R:P ratio – gives an estimate of how long production can continue at current rates. The US sits at one end of the spectrum, burning bright for a short time. Venezuela sits at the opposite end, with the world’s largest oil reserves but very limited production because of chronic underinvestment and international sanctions.

Speed versus stamina in the global oil market. The US is the world’s largest producer of oil and natural gas liquids by a wide margin, but it can only keep up this pace for the next decade before its current reserves are exhausted. Other large producers, such as Saudi Arabia, Iran and Canada could continue producing at current levels until the end of this century. Venezuela stands apart from the pack, being able to continue producing at its current (reduced) rate until we approach the year 2900.

Short-term disruption

Recent geopolitical disruptions surround the global oil market. Venezuela is in a fragile transition after a US raid in January captured President Nicolás Maduro and opened up Venezuela’s oil sector to foreign investors. Iran is experiencing widespread anti-government protests with renewed US threats of intervention raising concerns about supply disruptions. These events contributed to oil prices climbing 14% in January. If Iran’s supply was lost from the market, oil prices would spike by 30% in the short term and as much as 60% by year-end, according to BloombergNEF.. Oil is not directly relevant for UK electricity, as it is used for less than 1% of supply, but oil and gas prices tend to track one another. Changes in oil prices would be strongly felt at the petrol pump, and more broadly, oil affects inflation and the national trade deficit.

Long-term excess

Short-term supply disruptions could give way to the bigger picture of falling demand. Electric vehicles are saving 1.3 million barrels of oil per day, equivalent to Venezuela being taken offline. As sales are growing rapidly around the world, this is expected to quadruple to 5 million barrels by 2030. Oil demand has flatlined in the US since 2020, while the UK’s oil demand peaked back in 1973, and has since fallen 40%.

Much of the oil industry faces a dilemma: if we move into a peak demand world, it is not clear who will buy all the oil currently being produced. One thing is clear – if we are to meet global decarbonisation objectives, much of the oil that we know about must be left in the ground.

The same is true for gas. Supply constraints in 2025 meant that gas prices reach their highest levels since the energy crisis of 2022. Booming liquid natural gas (LNG) exports saw US gas prices rise, making coal-fired electricity more competitive, increasing American coal burn for the first time since 2021.

Impact on bills

A large new wave of LNG capacity is coming online in the next year, with IEA and Reuters forecasting a global glut. LNG export terminals are springing up around the world, with LNG trade expected to increase by 7%. Gas prices in Europe and the UK remain more than twice as high as those in the US, so greater trade holds the promise of both reducing and stabilising prices in future.

Cheaper gas means lower energy bills to come, especially as Britain’s electricity prices are almost entirely dictated by gas prices. Volatility is a bigger threat than price level: one geopolitical shock can still send energy prices spiralling, which strengthens the case for a diversified electricity mix. Cheaper fossil fuels also raise the risk of undoing progress on reducing carbon emissions: any relief on bills should not be an excuse to lock in another decade of oil and gas dependence.

Britain installed 2.6 GW of new solar PV capacity in 2025, the fastest build rate in over a decade. Several large solar farms were commissioned enabled by more supportive planning rules. Rooftop solar has also taken off as panel costs fell dramatically, and new-build homes are increasingly arriving “solar-ready”.

By contrast, wind farm deployment is sluggish. Capacity increased by 1.1 GW during 2025, the weakest growth since 2022, and the third year in a row of falling build rates. Offshore wind is still feeling the effects of higher financing costs and supply-chain disruption. Onshore wind is facing even more of a lull, with only 0.1 GW of net growth during 2025. England’s planning rules for new wind farms were relaxed in mid-2024, but policy changes take time to translate into turbines being built.

Britain’s electricity supply mix in the fourth quarter of 2025.

The generation mix during Quarter 4 was greener than ever, with carbon emissions down 15% year-on-year. Every renewable energy source increased output, with wind, solar and hydro all rising by more than 20%, and biomass output up 6%. Nuclear and gas output both fell by more than a tenth, while electricity exports almost doubled year-on-year, helped by the Greenlink interconnector that has increased capacity between Wales and Ireland.

Installed capacity and electricity produced by each technology. [1,2]

1 Other sources give different values because of the types of plant they consider. For example, Energy Trends records an additional 0.7 GW of hydro, 0.6 GW of biomass and 3 GW of waste-to-energy plants. These plants and their output are not visible to the electricity transmission system and so cannot be reported on here.
2 We include an estimate of the installed capacity of smaller storage devices which are not monitored by the electricity market operator.