Energy Roundup: August 2025

Welcome to the sixth issue of our Energy Roundup. Each quarter, we’ll bring you all the latest news, views and insights to help you navigate the ever-changing complexities of the energy industry. 

Energy Overview 

UK power and gas markets

Gas markets in Europe are steady for now, thanks to healthy storage levels and a slow start to summer demand, which have helped to ease prices. But as we head towards winter, there are still plenty of risks that could shake things up. These include rising cooling demand in Asia, the potential for US hurricanes, supply issues in Australia and Norway, and global political tensions.

US tariffs have raised concerns about economic growth, though progress on trade deals is being made. In the US, there's growing support for more sanctions on Russia, with Trump giving an early August deadline to end the war in Ukraine. This is something that could have a big impact on energy prices and a peace deal; if it happened, it would push prices down.

If the US were successful in arranging a permanent ceasefire between Russia & Ukraine, the return of Russian hydrocarbons into global markets could ease supply concerns, albeit with a likely staggered return post-agreement. Longer term, new LNG supply expected by 2027 could relieve pressure, though there’s uncertainty around whether Qatar can meet its delivery timelines. 

To stay up to date, sign up for our next Power Market webinar.

Power Market Update Webinar
Join James Chaplin, Senior Manager of Curve Trading, at our next power market updates webinar, to navigate current developments in the UK power market and get an outlook on future prices
Thursday 30 October, 3 pm
Register here

A brief outlook of non-energy costs

While energy costs are fairly straightforward, non-energy costs can be more complex. They include various government and third-party charges to cover the cost of transporting your energy. 

TNUoS

NESO published its first look at the Allowed Revenue for 2026/27 at the end of April, showing a big increase of around £1 billion in revenue to recover from consumers compared to this year. Most of that will be recovered via standing charges, but it would mean an equivalent average rise in costs of about £4.10/MWh, though the exact impact will depend on your charging band. That figure is likely to go even higher, with NESO stating that they have not included investment costs for the transmission network in England and Wales, which currently makes up almost half of TNUoS costs.

The new TNUoS price control period kicks off in April 2026 and runs for five years. Transmission companies submitted plans in December outlining £77 billion of investment that is needed to support the energy transition, although not all of that will feed into TNUoS charges straight away. Ofgem’s draft decision, published this summer, has largely backed the recovery of those costs. NESO will share a five-year forecast in August, but we won’t know final tariffs until January 2026.

UK’s modern industrial strategy 2025

On Monday, 23 June, the Government published The UK’s Modern Industrial Strategy 2025. Within the document, there were two policy measures that could impact NECs.

• British Industrial Competitiveness Scheme: Starting from 2027, it aims to reduce electricity costs by approximately £35-40/MWh up to 2030. It is designed to support thousands of businesses, particularly manufacturing electricity-intensive frontier industries. Eligible businesses will be exempt from paying the costs associated with the Renewables Obligation, Feed-in Tariffs, and the Capacity Market.
  
  It is uncertain how the British Industrial Competitiveness Scheme will be funded, but the current direction from the Government is that it won’t be recovered as an additional charge on consumers' bills but will be funded via existing public funds.
  
  “No new taxes or borrowing and no increase on bills for anybody else” -Jonathan Reynolds, Business Secretary
   
• British Industry Supercharger Package: There will be an increase in support for energy-intensive industries, with the Network Charging Compensation (NCC) scheme uplifted from 60% to 90%, providing additional price relief from 2026 for around 500 eligible businesses. We are assuming this increase in the NCC scheme will be funded (TBC) via the Energy Intensive Industry (EII) Support Levy as the existing NCC costs are. This means a ~£0.60/MWh increase in our EII Support Levy forecast from April 2026, but could also increase EII Support Levy costs by ~£0.40/MWh from Apr-25 if the government decides to backdate the implementation.

For more information, sign up for our next Monitor webinar.

Monitor (NECs explained) Webinar
Join us as we dive deeper into Monitor, our quarterly report covering non-energy costs. In this webinar, our experts will share more detailed updates on how the current non-energy costs impact businesses.
Wednesday 10 September, 11 am
Register here

Energy in the news

Clean Flexibility Roadmap: What it means for businesses

The UK Government’s Clean Flexibility Roadmap outlines a transformative shift in how electricity demand and supply are managed, with a strong emphasis on reducing emissions and creating opportunities for consumers - including businesses.

Consumer-led flexibility (CLF) involves the voluntary shifting of electricity use away from peak periods to times when supply is more abundant, cheaper and cleaner. This will give businesses that choose to participate greater control over their energy usage, and the opportunity to save money by adjusting operations to avoid peak pricing periods, using low-carbon technologies like batteries, or even selling their flexibility into energy markets. These changes can increasingly be automated, for example, through smart systems that adjust lighting, heating, or industrial equipment, minimising disruption to business processes.

The roadmap highlights substantial economic benefits tied to clean flexibility, including job creation in areas such as battery installation and construction of low-carbon infrastructure. With a coordinated effort between the Government, Ofgem, and the National Energy System Operator (NESO), the aim is to foster a supportive environment where businesses of all sizes can participate.

To accelerate uptake, NESO will set a public target for non-domestic consumer-led flexibility by the end of the year - helping to drive progress towards the Clean Power 2030 ambition of increasing non-domestic CLF from 0.8GW to 2GW.

By 2030 and beyond, the focus will be on scaling flexibility in sectors with large energy loads, such as commercial buildings, EV charging, and industrial processes. While participation remains voluntary, businesses that engage early can not only cut costs but also support the UK’s transition to a more resilient, low-carbon energy system.

How EDF is supporting Consumer-Led Flexibility

EDF is actively supporting Consumer Led Flexibility by working with customers to ensure they have the right electricity supply contract in place for their needs, and to help them unlock value from flexible energy use.  Building on this, through EDF's Virtual Power Plant, PowerShift, we use market-leading optimisation technology to connect and optimise assets like batteries and Electric Vehicles. By aggregating these flexible assets, customers can access new revenue streams, reduce costs and support grid stability through active participation in energy markets.

Read the full report here

REMA update: Zonal pricing rejected

In a significant development under the Review of Electricity Market Arrangements (REMA), the UK government has confirmed it will not pursue zonal pricing. Instead, it will advance a series of targeted reforms to strengthen the national wholesale electricity market.

The Department for Energy Security and Net Zero (DESNZ) has outlined several core elements of the revised national market design:

• Strategic Spatial Energy Plan (SSEP): To coordinate the location of generation and network infrastructure across GB.
   
• TNUoS and Connection Charging Reform: Aiming to improve cost predictability for investors and developers.
   
• Balancing Mechanism Improvements: Enhancing dispatch efficiency and cutting constraint costs.
   
• Accelerated Network Reinforcements: Expected to reduce constraint costs by up to £4bn by 2030.
   
• Constraint Management Markets: Introducing new tools to manage congestion and unlock flexibility.
   
• Improved Interconnector Flows: Boosting efficiency in cross-border electricity trading.

EDF welcomes the decision and the clarity it brings. While the shift away from zonal pricing reduces the near-term impact on electricity suppliers and customers, some proposed changes, particularly to TNUoS charges, the Balancing Mechanism, and constraint management markets, could still affect customer bills and create new flexibility opportunities. Turning these reform themes into practical, actionable policy will require sustained effort and close industry engagement in the months and years ahead.

Major overhaul of GHG Protocol corporate standards: What you need to know 

The Greenhouse Gas (GHG) Protocol is undergoing a significant overhaul of its corporate standards and guidance, marking a major transformation in how organisations measure and report greenhouse gas emissions. A key change is the increased focus on Scope 3 emissions, indirect emissions generated across the value chain. The revised standards will incorporate circular economy principles, aiming to connect emissions accountability with strategies that promote resource efficiency throughout the product lifecycle. The GHG Protocol is also revising its Scope 2 guidance on purchased electricity for companies' own use.  Proposed changes are aimed at improving the accuracy of emissions reporting, potentially including more granular tracking of renewable energy use and stricter criteria for how and where clean energy is sourced. 

Preparing for the transition

To stay ahead of these evolving requirements, businesses are encouraged to:

• Review current GHG reporting practices to identify potential gaps
• Engage with supply chain partners to prepare for enhanced Scope 3 reporting
• Explore circular economy strategies that align with future compliance and innovation goals
• Monitor Scope 2 developments, especially around energy procurement and data tracking

Timeline overview 

• Scope 2 Public Consultation expected late 2025
• Corporate Standard Draft Release expected in quarter 2 of 2026

A view from Camilla McCorkell, Director of EDF Business Solutions

Watch Camilla McCorkell, Director of EDF Business Solutions, as she discusses EDF’s continued recognition as Great Britain’s largest energy supplier to businesses, according to the latest Cornwall Insight Business Electricity Market Share report (July 2025). Discover what this milestone means for EDF, our customers, and the future of business energy in the UK.