UK Energy Market Report — 29 July 2026

What we’re watching today

• New GHG conversion factors for 2026 could tighten carbon‑accounting for commercial portfolios.
• Heat‑pump installations in June signal accelerating electrification of heating.
• Domestic energy price indices show the latest trajectory for electricity and gas costs.

Headlines and what they mean

Greenhouse gas reporting: conversion factors 2026

The Department for Energy Security and Net Zero (DESNZ) has published updated conversion factors for greenhouse‑gas reporting in 2026. These factors are used to translate energy use into CO₂ equivalents, meaning firms will need to adjust their reporting models to stay compliant and avoid under‑reporting emissions. source

Heat‑pump deployment: June 2026

DESNZ’s latest statistics show a continued rise in heat‑pump installations, reflecting policy incentives and the growing business case for electrified heating. For commercial buyers, the trend suggests a future shift in demand from gas to electricity, potentially increasing exposure to electricity price volatility while offering carbon‑reduction benefits. source

Domestic energy price indices (latest release)

The newest domestic energy price indices reveal modest upward pressure on electricity tariffs and a slight easing of gas prices compared with the previous month. This data is a leading indicator for wholesale price movements and will influence contract negotiations for large‑scale electricity and gas consumers. source

Energy Trends: UK gas

DESNZ’s Energy Trends release for UK gas provides the latest figures on gas consumption, price movements and seasonal demand patterns. A modest rise in gas prices is noted, but the overall consumption curve remains flat, suggesting limited short‑term pressure on gas‑intensive operations. source

Energy Trends: UK electricity

The electricity section of the Energy Trends series shows a continued decline in wholesale electricity prices, driven by high solar output (now 40.8% of the mix) and strong interconnector imports (20.3%). This supports lower price expectations for electricity‑heavy businesses, though the mix still includes 9% gas and 7.7% wind, preserving some price volatility. source

Warm Homes: Local Grant statistics – July 2026

The latest Warm Homes grant data indicates that millions of households will receive £150 off their winter energy bills. While aimed at domestic consumers, the programme may reduce overall demand peaks, indirectly benefiting commercial customers by smoothing grid load during winter evenings. source

Geopolitics and global markets

China’s renewed commitment to clean‑energy investment, even as coal consumption rises, signals a potential long‑term shift away from fossil fuels that could dampen global coal demand and support lower carbon prices source. Meanwhile, US oil producers are exercising caution as WTI hovers near $85 per barrel, keeping oil‑related cost pressures moderate for the UK market source. Saudi Arabia’s maritime coalition to protect oil shipments adds a layer of supply security, reducing the risk of sudden price spikes source. Finally, renewed drone attacks on Russia’s Volgograd refinery by Ukraine introduce short‑term supply uncertainties that could ripple through European fuel markets source.

The view from the trade desk

The grid today is characterised by a low carbon intensity forecast of 72 gCO₂/kWh, driven by a solar‑dominant generation mix (40.8%) and substantial imports (20.3%). Nuclear (12.5%) and biomass (9.6%) provide firm low‑carbon output, while gas still contributes 9% and wind 7.7%. This composition supports relatively cheap, low‑carbon electricity, but the residual gas share means price volatility remains a factor for gas‑intensive users.

What to do this week

• Review your carbon‑accounting methodology against the new 2026 GHG conversion factors and adjust reporting templates accordingly.
• Evaluate the cost‑benefit of accelerating heat‑pump adoption for on‑site heating, especially in light of the rising electricity share of the mix.
• Use the latest domestic price indices to benchmark existing contracts and consider hedging strategies for electricity exposure.
• Monitor gas price trends from the Energy Trends release and assess the need for short‑term gas contracts or demand‑side flexibility.
• Leverage TUS’s flex‑management platform (150 + GWh under management) to capture any upside from the current low‑carbon intensity environment.

Bottom line

Regulator data points to a tightening carbon‑reporting regime, a steady rise in heat‑pump deployment and modest upward pressure on electricity prices, while the generation mix keeps carbon intensity low. Global oil market signals suggest stable fuel costs for now, but geopolitical risks remain. Commercial buyers should sharpen carbon accounting, consider electrification pathways, and lock in favourable electricity terms while staying agile to gas price movements.