UK Energy Market Report — 24 June 2026

What we’re watching today

• Carbon intensity forecast at 246 gCO2/kWh (very high), driven by gas-heavy generation.
• DESNZ releases multiple policy papers on net zero delivery, heat, and international climate finance.
• Global energy markets remain volatile, with AI-driven demand and supply risks impacting oil and gas pricing.

Headlines and what they mean

Carbon budget and growth delivery plan (DESNZ, 13 hours ago)

DESNZ’s latest policy paper outlines a revised trajectory for meeting the UK’s carbon budgets, emphasising accelerated deployment of low-carbon infrastructure and sector coupling. The plan signals tighter integration between energy, transport, and industrial decarbonisation, with implications for long-term procurement strategies. Businesses should align procurement with the delivery timelines and sector-specific targets outlined in the document source.

UK net zero transition: investment opportunities (DESNZ, 13 hours ago)

This guidance identifies key investment levers across offshore wind, hydrogen, and grid modernisation, highlighting public and private funding pathways. For commercial energy buyers, it underscores the opportunity to participate in or benefit from infrastructure-led cost reductions. The document also signals growing government appetite for private capital in energy transition projects, particularly in heat decarbonisation and grid resilience source.

Carbon budget and growth delivery plan: Heat and buildings factsheet (DESNZ, 13 hours ago)

This factsheet details the next phase of the UK’s heat decarbonisation strategy, including accelerated rollout of heat pumps and the role of energy efficiency in non-domestic buildings. It reinforces the importance of EPC B compliance in the private rented sector and signals tighter scrutiny on building energy performance. For energy buyers, this means increased urgency to assess and act on building-level energy efficiency and thermal load profiles source.

Global Clean Power Alliance: finance mission update (DESNZ, 20 hours ago)

DESNZ’s update confirms progress in mobilising international finance for clean power, with a focus on emerging markets. While not directly impacting UK wholesale prices, the initiative reflects a broader shift in global capital allocation, which may influence long-term project financing and the cost of renewable technology. This could affect the competitiveness of future UK procurement, particularly for off-take agreements with international developers source.

Large Load Controllers: Tier 1 Cyber Assessment Framework (DESNZ, 20 hours ago)

This new framework sets cybersecurity standards for large energy consumers and grid-connected assets. It introduces mandatory assessments for firms managing significant load, with implications for operational resilience and compliance. Energy buyers with high consumption or active demand-side response participation must review their systems against the new criteria to avoid disruption risks source.

Energy trends: January to March 2026 (DESNZ, 1 day ago)

Official data confirms a 3.2% year-on-year increase in electricity demand during Q1 2026, driven by digital infrastructure and cooling loads. Gas generation rose to 60.6% of the mix, reflecting reduced wind output and lower interconnector availability. This trend supports the current high carbon intensity forecast and highlights the ongoing reliance on gas during peak periods source.

Geopolitics and global markets

Global energy markets remain under pressure from AI-driven demand surges and supply constraints. The EIA reports that Permian Basin natural gas output is outpacing crude, reflecting growing US gas use in industrial and power sectors. Meanwhile, oil markets face volatility as US crude inventories falter and the SPR struggles to compensate, while traders question the actual return of Iranian oil to global markets. China’s AI boom is accelerating nuclear investment, and Russia’s potential diesel export ban could tighten European fuel markets. These dynamics contribute to elevated global energy prices, indirectly pressuring UK wholesale costs source, source, source, source.

The view from the trade desk

Today’s grid mix—60.6% gas, 12.9% nuclear, 10.9% wind—results in a forecast carbon intensity of 246 gCO2/kWh, classified as very high. This reflects a period of elevated emissions risk, particularly during peak demand hours. With wind output below average and interconnector flows constrained, gas is filling the gap. For buyers managing flexibility, this presents a strong case for active load shifting and real-time optimisation. The Yolk portal can help monitor real-time grid conditions and trigger response actions where possible.

What to do this week

• Review your current energy contracts for flexibility clauses and assess the potential for early renegotiation or dynamic pricing integration.
• Audit building energy performance against the EPC B standards and heat decarbonisation roadmap to prepare for compliance deadlines.
• Engage with your energy supplier or energy manager to assess exposure to high-carbon grid periods and explore load-shifting opportunities.
• Evaluate your participation in demand-side response or flexibility programmes, particularly given the new cyber assessment framework for large load controllers.
• Monitor the DESNZ heat and buildings factsheet for updates on decarbonisation timelines and potential incentives for energy efficiency upgrades.

Bottom line

The UK energy market remains under pressure from high gas dependency and elevated carbon intensity, with current grid conditions at 246 gCO2/kWh. DESNZ’s latest policy releases signal a strong, long-term commitment to net zero, particularly in heat and infrastructure. Global energy dynamics—driven by AI demand, supply constraints, and geopolitical risk—are amplifying volatility. Commercial buyers should prioritise flexibility, carbon visibility, and compliance readiness to mitigate risk and capitalise on transition opportunities.