UK Energy Market Report — 07 October 2026

What we’re watching today

• Ofgem’s Smart Energy Code (SEC) proposals – potential changes to smart‑meter data handling and demand‑response frameworks.
• Ofgem’s Uniform Network Code (UNC) revisions – new rules on network balancing and capacity allocation.
• Ofgem’s Sizewell C price‑control model amendment – could affect nuclear cost recovery and downstream tariffs.
• DESNZ’s Great British Grid initiative – faster connection times and lower connection charges for new projects.
• DESNZ road‑fuel sales and stock data – latest trends in diesel and petrol availability for fleet managers.

Headlines and what they mean

Ofgem MP293 Smart Energy Code (SEC) proposed changes

The regulator has published a draft of MP293, updating the SEC to tighten data‑privacy safeguards and broaden the scope for automated demand‑response services. For commercial buyers, the changes could unlock more granular flexibility options, allowing larger firms to participate in ancillary‑service markets without bespoke contracts. However, the tighter data‑security rules may require upgrades to existing smart‑meter infrastructure, adding short‑term capital costs. Source

Ofgem 0920 Uniform Network Code (UNC) proposed changes

Ofgem’s UNC revision aims to modernise the way network capacity is allocated, introducing a more dynamic congestion‑management framework. The draft emphasises greater transparency in capacity pricing and introduces new provisions for distributed energy resources (DERs). Energy‑intensive businesses should anticipate a shift in transmission‑service charges and may need to reassess their network‑use forecasts, especially if they are planning new on‑site generation or storage. Source

Ofgem Proposed direction to modify Sizewell C Price Control Financial Model (PCFM)

The decision proposes adjustments to the Sizewell C PCFM, potentially altering the allowed return on investment and the treatment of de‑risking costs. While the nuclear project remains under construction, any change to its price‑control regime can ripple through wholesale pricing, as Sizewell C’s output will form a larger share of low‑carbon baseload. Commercial buyers should monitor the final direction for signs of future price‑level impacts on the wholesale market. Source

Great British Grid to speed up connections and cut bills

DESNZ announced a programme to accelerate the connection process for new generation and storage projects, promising reduced timelines and lower connection fees. Faster connections can bring additional capacity to the grid sooner, easing the current reliance on gas‑fired generation (44.3% of the mix) and supporting the transition to renewables. Companies planning new on‑site generation or looking to procure green electricity should engage early to benefit from the streamlined process. Source

Official Statistics: Road fuel sales, deliveries and stock levels – 27 September 2026

The latest DESNZ data shows a modest rise in diesel deliveries and a tightening of fuel stocks ahead of the winter heating season. For fleet operators, the trend signals potential pressure on wholesale fuel prices and underscores the importance of reviewing hedging strategies. The data also highlights regional variations, with southern depots reporting tighter inventories than the north. Source

Geopolitics and global markets

Brent crude has rebounded above $100 a barrel after Houthi attacks disrupted Saudi infrastructure, tightening global supply and adding upward pressure on oil‑linked generation costs in the UK source. The market’s resilience is reinforced by the G7’s 100 million‑barrel release, which is already priced in, but the continued volatility means forward‑looking price risk remains elevated source. Meanwhile, low wind generation in the UK has prompted another power‑margin warning, highlighting the need for flexible backup capacity as wind output sits at just 20.8% of the generation mix today source. US crude inventories have slipped, adding further upward bias to global oil prices, while a Gulf storm threatens up to 3 million bpd of refining capacity, compounding supply concerns source. These dynamics collectively lift the risk premium on UK wholesale power and gas contracts.

The view from the trade desk

The grid is forecast to run at a high carbon intensity of 189 gCO₂/kWh, driven by a dominant gas share (44.3%) and a modest wind contribution (20.8%). With coal effectively phased out, the system’s flexibility hinges on demand‑response and storage – assets that are directly impacted by the SEC and UNC proposals. The current generation mix underscores the value of TUS’s flex‑management platform, which now controls over 150 GWh of flexible capacity, delivering around 20 % more savings than supplier‑only forecasts.

What to do this week

• Review your smart‑meter contracts and assess whether upcoming SEC changes could unlock additional demand‑response revenue.
• Model the impact of the UNC revisions on your transmission‑service cost assumptions, especially if you plan new on‑site generation.
• Re‑evaluate fuel‑hedge positions in light of the latest road‑fuel stock data and the upward trend in Brent crude.
• Engage with the Great British Grid programme early if you are pursuing new renewable or storage projects to benefit from faster connections.
• Monitor wind‑generation forecasts and consider short‑term flexibility options (e.g., battery storage or flexible load) to mitigate low‑wind margin risks.

Bottom line

Regulatory updates from Ofgem and DESNZ are reshaping the UK’s flexibility landscape just as global oil markets tighten after Houthi attacks and Gulf storm threats. With carbon intensity at a high 189 gCO₂/kWh and gas still supplying nearly half of generation, commercial buyers should prioritise flexibility, hedge fuel exposure, and leverage fast‑track connection pathways to protect costs and meet sustainability targets.