UK Energy Market Report — 23 June 2026

What we’re watching today

• High carbon intensity forecast (225 gCO2/kWh) signals a gas-heavy grid today.
• DESNZ’s new wind turbine noise guidance and offshore environmental rules may affect future project timelines.
• Global oil markets react to peace talks and supply risks in the Middle East.

Headlines and what they mean

UK – Mexico partnership on climate, energy and nature

This new bilateral initiative underscores the UK’s expanding role in international climate diplomacy, particularly in advancing clean energy deployment and nature-based solutions. While not directly impacting wholesale markets, it signals long-term strategic alignment with emerging economies, potentially influencing future green investment flows and carbon credit dynamics. The partnership may also create new opportunities for UK firms in cross-border energy infrastructure projects source.

Assessment and rating of wind turbine noise guidance: proposed updates

DESNZ has released proposed updates to noise assessment standards for wind turbines, aiming to balance community concerns with renewable deployment. The consultation could delay onshore wind projects if new thresholds are adopted, particularly in sensitive areas. For commercial energy buyers, this may affect the timing and cost of procuring renewable supply, especially where wind is a key component of procurement strategies. The outcome will influence the pace of decarbonisation and the reliability of long-term renewable contracts source.

Jackdaw Field Development decision

DESNZ has approved the Jackdaw Field Development, marking a continued commitment to offshore oil and gas extraction in the North Sea. While this supports short-term energy security and domestic supply, it also reinforces the UK’s dual strategy of maintaining fossil fuel infrastructure while advancing net zero. For energy buyers, this decision may signal longer-term volatility in gas prices, particularly if new offshore production increases supply but does not offset structural demand shifts. The approval also highlights ongoing regulatory support for the sector, which may influence investor confidence in fossil-based assets source.

Energy trends: January to March 2026

The latest energy trends report shows a sustained reliance on gas (52.4% today), with wind contributing 17.6% and nuclear 13.1%. Solar output remains low at 1.7%, indicating a day with limited solar contribution. The data confirms a continued dependence on gas for base-load generation, despite the growth in renewables. This mix underpins today’s high carbon intensity forecast and suggests that short-term procurement strategies should account for grid volatility and emissions risk, particularly for firms with net zero targets source.

Oil and gas: offshore environmental legislation

The updated offshore environmental legislation strengthens regulatory oversight of decommissioning, emissions reporting, and spill response. While not immediately affecting prices, it raises compliance costs for operators and may influence investment decisions in new projects. For energy buyers, this signals a tightening of environmental standards across the sector, potentially increasing the cost of fossil-based supply and reinforcing the case for long-term renewable procurement. The legislation also reflects broader policy intent to align offshore operations with net zero goals source.

Geopolitics and global markets

Global oil markets remain sensitive to Middle East developments, with peace talks in Tehran and Washington creating uncertainty. The Strait of Hormuz remains partially closed, with conflicting reports on shipping flows, contributing to price volatility. Meanwhile, Saudi Arabia is turning to Russian fuel oil as Iran’s conflict impacts regional supply, highlighting ongoing supply chain fragility. These dynamics are pressuring crude prices, with recent declines driven by reduced demand expectations and geopolitical risk pricing. For the UK, this volatility feeds through to wholesale gas and electricity markets, particularly given the UK’s exposure to global LNG and oil-linked gas pricing mechanisms. The EU’s continued scramble to replace Russian gas has driven record inflows to Greek energy infrastructure, reinforcing the importance of diversified supply routes source, source, source.

The view from the trade desk

Today’s grid carbon intensity of 225 gCO2/kWh, driven by a 52.4% gas share and low solar output, reflects a high-emission generation mix. With wind at 17.6% and nuclear stable, the system remains vulnerable to gas price spikes. This is particularly relevant for businesses with Scope 2 emissions targets. Procurement strategies should prioritise flexibility and real-time carbon tracking, especially given the upcoming consultation on wind turbine noise, which may affect future renewable availability. The Yolk portal can help monitor real-time grid conditions and align procurement with low-carbon windows.

What to do this week

• Review current gas and power contracts for exposure to high-carbon periods; consider shifting load to wind-rich windows where possible.
• Engage with suppliers on flexibility options, especially those with access to real-time carbon data via platforms like Yolk.
• Monitor the outcome of the wind turbine noise consultation, as it may impact the timing and cost of future renewable procurement.
• Evaluate potential eligibility for the Heat Network Efficiency Scheme (HNES) or Heat Pump Ready Programme, both of which offer innovation funding for decarbonisation projects.
• Assess exposure to global oil and gas price volatility, particularly in long-term contracts, and consider hedging strategies for high-risk periods.

Bottom line

Today’s high grid carbon intensity reflects a gas-dominated generation mix and limited renewable output. While DESNZ’s new international partnerships and offshore regulations signal long-term decarbonisation intent, near-term market conditions remain sensitive to global oil and gas dynamics. Energy buyers should prioritise flexibility, real-time carbon visibility, and engagement with innovation funding to manage emissions and cost risk effectively. With 150+ GWh under flex management and +20% accuracy vs supplier projections, TUS continues to deliver optimised outcomes in volatile markets.