UK Energy Market Report — 29 August 2026

What we’re watching today

• DESNZ releases the latest UK ETS allocation table for installation operators.
• Ofgem renews the ban on acquisition‑only tariffs (BAT) beyond March 2027.
• DESNZ publishes the Green Gas Support Scheme (GGSS) expenditure forecast and upcoming tariff changes.
• A record number of heating‑oil households have applied for heat‑pump installations.
• First regional solar breakdown shows installations hitting historic highs.

Headlines and what they mean

DESNZ: UK ETS Allocation Table for operators of installations

The Department for Energy Security and Net Zero has published the 2026‑27 allocation table for the UK Emissions Trading Scheme, confirming the volume of allowances each installation will receive. This provides certainty for large emitters and signals the level of carbon cost that will be embedded in electricity and heat contracts, prompting commercial buyers to reassess exposure and consider flex‑management to optimise consumption against allowance prices. source

Ofgem: Renewal of Ban on Acquisition‑only Tariffs (BAT) after March 2027

Ofgem has confirmed the continuation of the ban on acquisition‑only tariffs, which prevent customers from switching suppliers without a contract break. The renewal extends the protection to March 2028, reinforcing market stability and reducing the risk of hidden price escalations for businesses. Buyers should verify that their contracts are not structured as BATs and explore competitive offers on the TUS portal. source

DESNZ: Green Gas Support Scheme (GGSS) expenditure forecast and tariff change notices

The GGSS update outlines the projected spend on renewable gas incentives and announces forthcoming tariff adjustments for eligible suppliers. Higher support levels could improve the economics of biomethane and hydrogen blends, offering a pathway for firms with gas‑intensive processes to lower carbon footprints while managing costs. Monitoring the final tariff notice will be key for budgeting future gas contracts. source

DESNZ: Record number of heating‑oil households apply for a heat pump

A government‑run portal reports an unprecedented volume of heat‑pump applications from former heating‑oil users, reflecting both policy incentives and rising oil prices. This surge will accelerate the transition to electric heating, increasing electricity demand during winter evenings. Commercial buyers with onsite heating should evaluate the timing of retrofits and the impact on their load profiles. source

DESNZ: First regional solar breakdown as installations hit record highs

The latest regional data shows solar PV installations surpassing previous records, driven by falling panel costs and supportive local schemes. Regions with strong solar growth may see lower daytime electricity prices, creating opportunities for demand‑side response and storage optimisation. Companies with flexible loads should consider aligning consumption with solar‑rich periods. source

Geopolitics and global markets

Europe’s exposure to Russian sanctions remains uneven, with a “major blind spot” that could allow continued energy flows and price volatility source. At the same time, the Iran‑Russia conflict is driving VLCC charter rates sky‑high and keeping LNG cargoes stranded in the Hormuz corridor, prompting Qatar to extend force‑majeure on European supplies and pushing gas prices higher across the continent source. These dynamics add upward pressure on wholesale gas and power prices, even as the UK grid enjoys low carbon intensity.

The view from the trade desk

The forecast carbon intensity of 52 gCO₂/kWh reflects a wind‑dominated mix (46.8 %) complemented by nuclear (23.7 %) and imports (12.4 %). With gas contributing only 7.2 % and hydro negligible, the grid is positioned for low‑price periods during windy spells. Buyers with flexible demand can capture cost savings by shifting load to these windows, while keeping an eye on any sudden gas price spikes from the geopolitical backdrop.

What to do this week

• Review all existing contracts for acquisition‑only tariff clauses and renegotiate where possible.
• Model the impact of the upcoming GGSS tariff changes on gas‑intensive processes.
• Assess the feasibility of adding heat‑pump retrofits to onsite heating assets, factoring in the surge of applications.
• Align flexible loads with the high‑wind generation forecast to maximise cost efficiency.
• Leverage TUS’s flex‑management platform (150+ GWh under management, delivering >20 % savings vs supplier forecasts) to fine‑tune consumption patterns.

Bottom line

Regulatory clarity on emissions allowances, tariff bans and green‑gas support, combined with a record solar build‑out and a wind‑rich generation mix, creates a favourable environment for cost‑optimised energy procurement. However, external risks from Russian sanctions and the Iran‑Russia conflict keep wholesale gas and power markets volatile, underscoring the need for proactive demand‑side strategies and robust contract reviews.