The UK Government has put planning reform, land access and electricity infrastructure delivery at the centre of a new slate of measures that it hopes will ultimately lower energy bills and give the country more energy security.
While the headlines will focus on the attempt at breaking the link between gas and electricity prices, the package actually stretches much further. That’s because under a new package of measures announced today, the Government is taking a full-system approach – looking at grid reform, public land, EV charging, heat pumps, rooftop solar, and changing the underlying pricing mechanism.
In terms of that pricing mechanism, the UK Government plans to offer voluntary long-term fixed-price contracts to existing low-carbon generators not already on fixed-price arrangements. They account for around a third of the UK’s electricity supply, and are currently benefiting from the higher cost of gas. That’s because electricity prices are set by the highest unit cost and Russia’s aggression against Ukraine and the US/Israeli conflict with Iran have sent the cost of gas soaring.
While the fixed-price contracts will give those generators price certainty, many won’t want to give up the massive profits they’re reaping from being tied to the price of gas. That’s why the UK Government is also bringing out the stick by raising the Electricity Generator Levy from 45% to 55%.
Many within the industry have long called for the decoupling of electricity prices from the price of gas, especially now that more than half of the UK’s electricity is generated by cheaper renewables. It’s especially important now, however.
The UK has had the highest industrial electricity prices among reporting IEA countries since 2021, but the problem is expected to get worse in the wake of the Iranian conflict. That has already led to some key investment decisions, with OpenAI blaming high energy costs as the reason it put the brakes on its Stargate UK project. That could blow up the Government’s plans to grow the economy, with the IMF already warning that the UK could see the biggest impact to growth from the war with Iran amongst G7 nations. Those dire readings have forced the Government to act.
A renewed focus on delivery
The big story is the attempt to decouple gas and electricity prices, but there’s also been some movement on other pain points that continue to impact the industry. The Government is again promising to streamline planning, land access and grid connection processes to cut delays for essential grid upgrades and renewable projects.
Of course, we’ve been here before. There’s been countless promises when it comes to unclogging the grid backlog, and yet we still have situations where projects are cancelled due to their inability to get a realistic grid connection date. This time, however, the Government is promising to redouble its efforts.
The newly published Reformed National Pricing Delivery Plan is explicitly built on earlier work, including the Clean Power 2030 Action Plan, TMO4+ queue reform and Ofgem’s wider push to accelerate connections, while separate work on electricity network consents, land access and rights has been under way since 2025.
That Reformed National Pricing plan makes clear that ministers want a more strategically planned electricity system, with the Strategic Spatial Energy Plan at its centre. The idea is to move away from a system in which developers, networks and policymakers make siting decisions in parallel, and towards one in which generation, storage and network build are more deliberately aligned.
The Government’s initial analysis says getting investment into the right places at the right times could yield £10-20 billion in present-value benefits, with savings gradually building after 2030 and reaching £20-40 on a typical annual dual-fuel household bill by 2040.
That is also where the delivery plan becomes more relevant to the electrical sector than its title first suggests. It says the connections regime will be one of the primary levers in deciding where generation is built, and proposes building on TMO4+ so that ‘strategic alignment’ would in future include the Strategic Spatial Energy Plan. It also floats the idea of ‘Connection Capacity Thresholds’, which could shape how much connection volume is prioritised for particular technologies in particular zones.
Some industry insiders have long called on the Government to take a more analytical approach to the grid. After all, you just have to look at the number of speculative projects that are in the queue to understand that not everything is going to be built. For example, there has long been a worry that data centres would overwhelm the grid, and yet the reality is much murkier.
The move will not be universally welcomed though. Some developers will like the promise of a clearer route through the queue and a system that takes strategic needs more seriously. Others will worry about how much discretion ends up sitting with Government, NESO and Ofgem over project sequencing and siting. Even the delivery plan acknowledges the trade-offs, understanding the difficulty it’ll face when it comes to setting thresholds. After all, set them too loosely and the system risks a fresh ‘gold rush’ into the most commercially attractive zones; set them too tightly and there is a danger of over-engineering the queue.
It’s already testing those waters with AI Growth Zones, which are specifically designated as they offer excess electricity capacity to absorb data centres into the grid. It could further expand the concept to other sectors.
Beyond the transmission network
The new package of measures doesn’t just focus on the transmission network, however. The Government says it will legislate this summer to expand permitted development rights for EV charging, including cross-pavement solutions, and consult on building regulation changes and an ‘Ability to Charge’ to improve access for renters and leaseholders.
It will also consult on easing permitted development rules for air source heat pumps, explore support for plug-in solar for low-income households, increase the Boiler Upgrade Scheme grant to £9,000 for properties heated by oil and LPG, and back more rooftop solar on schools, colleges and social housing. On top of that, ministers want to use more public land, including brownfield, industrial and railway sites, for solar and wind.
It’s that broader approach to the UK’s energy problems that the Government is hoping will actually meaningfully lower bills and ultimately unlock investment. Whether it actually translates into faster delivery on the ground is another matter. The industry has heard plenty about queue reform, land access and planning acceleration before. What ministers are now promising is not simply more ambition though, but a more interventionist system to force that ambition through.
As Energy Secretary Ed Miliband put it, “As we face the second fossil fuel shock in less than 5 years, the lesson for our country is clear: The era of fossil fuel security is over, and the era of clean energy security must come of age. That’s why we’re doubling down on clean power, to give our country energy security and bring down bills for good.”
The real test for the sector is whether that doubling down finally produces the one thing the industry has been asking for all along: a faster route from policy to connection.
