UK Energy Market Report — 03 September 2026

What we’re watching today

• Ofgem’s Phase 1 energy‑code reform and licence changes for code managers.
• DESNZ’s Capacity Market pre‑qualification rules for 2027 and the inclusion of new technologies.
• Updated guidance on the Energy Savings Opportunity Scheme (ESOS) compliance.
• The decision on the Jackdaw offshore gas field development.
• Non‑domestic smart‑meter rollout obligations post‑2025.
• Green Gas Support Scheme tariff change notices.

Headlines and what they mean

Ofgem – Energy code reform phase 1: code manager licence modifications

The regulator is consulting on amendments to the licence conditions for code managers, aiming to streamline the way network codes are developed and enforced. For commercial buyers this could translate into more transparent tariff structures and faster adoption of innovative demand‑side response schemes. Suppliers will need to adjust their compliance processes, potentially passing efficiency gains onto large customers. source

DESNZ – Capacity Market: changes for Prequalification 2027

DESNZ has published a consultation on the criteria that generators must meet to be pre‑qualified for the 2027 Capacity Market. The focus is on flexibility, low‑carbon technologies and longer‑term reliability. Companies should assess the eligibility of any contracted capacity and consider early engagement with providers that meet the new standards to avoid future shortfalls. source

DESNZ – Energy Savings Opportunity Scheme (ESOS): find out if you qualify and how to comply

The ESOS guidance clarifies the eligibility thresholds and data‑collection requirements for large organisations. Non‑compliance can trigger significant penalties, while early participation can unlock efficiency funding and improve ESG reporting. Energy buyers should verify their status and begin baseline audits to meet the 2026 deadline. source

DESNZ – Decision: Jackdaw Field Development

The government has approved the Jackdaw offshore gas field, adding roughly 2 billion cubic metres of gas per year to the UK supply outlook. While this bolsters domestic gas security, the additional supply may temper price spikes in the winter, but also raises scrutiny on carbon‑intensity and the need for accompanying CCS or hydrogen blending. source

DESNZ – Non‑domestic smart meter rollout post‑2025

A new consultation sets out the obligations for energy suppliers to install smart meters in non‑domestic premises after 2025. Accelerated rollout promises better demand‑side visibility and the ability to offer time‑of‑use tariffs, which can be leveraged by large energy users to manage costs. Suppliers will need to update contracts and data‑management systems. source

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

The latest GGSS tariff adjustments reflect higher renewable gas production costs and a modest increase in the support price per kilowatt‑hour. Buyers with contracts tied to green gas should review the impact on their fuel‑mix targets and consider hedging strategies to lock in rates before the next review period. source

Geopolitics and global markets

Oil markets remain volatile as the Iran‑U.S. conflict prompts OPEC+ to hold output steady, limiting supply relief and keeping crude prices elevated. At the same time, the U.S. strategic petroleum reserve drawdown adds further pressure on global oil and diesel markets, with U.S. diesel prices edging toward the April‑war peak levels. Reduced traffic through the Strait of Hormuz and Ukraine’s refinery strikes also tighten European fuel supplies, feeding through to UK wholesale pricing. source source source source source

The view from the trade desk

The grid forecast shows a low carbon intensity of 72 gCO₂/kWh, driven by a strong wind share of 57.3% and a solid nuclear contribution of 16.9%. Gas remains at 14.7%, indicating that any supply shocks in the oil market are unlikely to translate directly into electricity price spikes today, but they could affect gas‑linked contracts and ancillary services. Buyers should monitor the wind output outlook and consider flexible contracts that capture low‑intensity periods.

What to do this week

• Review your supplier contracts for upcoming smart‑meter obligations and explore time‑of‑use tariffs.
• Conduct an ESOS eligibility check and start data collection to avoid penalties.
• Assess the impact of the GGSS tariff change on any green‑gas purchases and consider hedging.
• Engage with capacity‑market providers early to ensure eligibility under the new 2027 pre‑qualification rules.
• Model the effect of higher oil and diesel prices on any fuel‑linked cost components in your energy budget.

Bottom line

Regulatory activity this week tightens compliance expectations around the energy code, capacity market and smart‑meter rollout, while the Jackdaw field adds modest gas supply. Combined with heightened oil market volatility from geopolitical tensions, commercial buyers should focus on contract flexibility, efficiency measures and early engagement with capacity providers to safeguard costs in an uncertain price environment.