Following the publication of the UK Budget on 26 November 2025, members of our Green Energy team have summarised the key points relevant to the sector.
National policies:
- The government will end the Energy Company Obligation, currently funded by consumer bills, and the government will fund 75% of the Renewables Obligation for three years which it says will remove £150 from household energy bills (effective from April 2026).
- Taking forward commitment to slash energy prices for industry, government says this could help 7,000 UK businesses at a cost of £4bn. This will be delivered by the British Industrial Competitiveness Scheme which will reduce electricity costs by c.£35-40/MWh. Details on this scheme are here.
- Plan to cut red tape for nuclear, government will deliver its strategy in 3 months from its Nuclear Regulatory Taskforce to deliver recommendations of the Fingleton report published 5 days ago.
- New excise duty for electric and hybrid cars
- 3p per mile for electric cars
- 1.5p for plug-in-hybrids
Regional policies:
Wales:
- Anglesey Rolls-Royce SMR project - £2.5bn in funding from government
- Establishment of two AI Growth zones, £10m investment in semi conductors – potentially relevant for data centres.
- Carbon capture cement plant at Padeswood announced, first of its kind in the UK.
Scotland:
- £14m for Low Carbon scheme in Grangemouth
- Establishment of Forth Green Freeport - £7.9bn investment which will boost UK production of clean energy and sustainable fuels including offshore wind.
Martin Pibworth, Chief Executive of SSE plc said:
"Today’s budget is a positive step towards fairer energy bills while keeping the focus on building a cleaner power system. Moving legacy costs off bills and into general taxation means households will see the benefits of energy infrastructure investment sooner - and it supports the shift to electrification that’s essential for unlocking the UK’s economic potential.”
We look forward to sharing further insight into these policies as further details are announced.
If you have any green energy queries, please get in contact with Sam Tye or Jonathan Cohen
