Department for Energy Security & Net Zero

Funding for National Gas Transmission is set by Ofgem’s RIIO (Revenue = Incentives + Innovation + Outputs) framework for each five-year regulatory period.

For security reasons, Ofgem does not publish the specific allowances awarded for physical or cyber security. These investments are designed to strengthen resilience, often for Critical National Infrastructure, and disclosure could increase risks to individual companies and the wider energy sector.

The key to bringing down energy bills in the long term is clean power. With gas prices still significantly higher than historic levels, our exposure to international fossil fuel markets is still the main driver of high energy bills.

Taken together, the actions announced by my Rt. Hon. Friend the Chancellor at the Budget take an average £150 of costs off people’s energy bills and deliver on funding more of the investment we need in our energy system through public expenditure rather than levies. £7 billion worth of the historic Renewables Obligation levy has been moved into public expenditure and the ECO scheme has been scrapped. The government is delivering the biggest public investment in home energy efficiency ever, increasing the settlement we received at the Spending Review.

The Government will legislate to meet its landmark manifesto commitment to end new licences to explore new oil and gas fields.

To support existing fields and infrastructure, the Government will introduce new Transitional Energy Certificates for a managed, prosperous and orderly transition.

The evidence suggests that even if new licenses were issued it would have only a marginal impact on overall production in the North Sea given it is a super mature basin which has been in decline for more than two decades.

For most oil-heated homes transitioning to clean heat will include installing a heat pump. Grants of £7,500 are available through the Boiler Upgrade Scheme (BUS). As hydronic heat pumps may not be suitable for every property, BUS supports biomass boilers in rural homes with a £5,000 grants and we will offer £2,500 grants to support air-to-air heat pumps from 2026.

Government has recently published a consultation exploring the role of alternative clean heating solutions. The consultation opened on 18 November and will run for 12 weeks.

Finally, we are undertaking research to collect data on the costs of different approaches to decarbonising the most complex housing archetypes and expect to receive results early next year.

The Chancellor announced in the budget the transfer of the full reserve of £2.3bn which will increase member incomes by 41%. The transfer has been completed and the required amendments to the scheme rules agreed and signed.

Implementation is a matter for the Trustees but we understand they have put processes in place so that the first payments will be made on 23 December.

The government has committed to additional grant funding of £1.5bn which will be directed to upgrading low-income households, benefitting those in fuel poverty. This will take total Warm Homes Plan funding to around £15 billion; more details will be set out soon. The government continues to improve home energy efficiency through Warm Homes: Social Housing Decarbonisation, Warm Homes: Local Government and the ongoing Boiler Upgrade Scheme supporting thousands of households to upgrade their heating systems.

The government is committed to launching Fuel Finder as quickly as possible.

The Motor Fuel Price (Open Data) Regulations 2025 were debated in the House of Lords on 4 December 2025 and should be in place from 18 December 2025.

Robert Gordon University estimates that by the early 2030s, the UK oil and gas workforce will be between 57,000 and 71,000, down from 115,000 in 2024.

The natural decline of North Sea oil and gas has seen more than 70,000 jobs lost in the last decade. The Government published its North Sea Future Plan (26 November), setting out how we will support our North Sea supply chains, protect current jobs, and secure the next generation of good jobs.

Details of Ministers' and Permanent Secretaries' meetings with external individuals and organisations are published quarterly in arrears on GOV.UK.

No such assessment has been made.

We recognise that for many households energy bills remain too high. That's why on 19 June we announced that we are expanding the Warm Home Discount to around an additional 2.7 million households. This means that from this winter, around 6 million low-income households will receive the £150 support to help with their energy bill costs.

At Budget the Chancellor confirmed that government endorses the report’s approach and accepts the principles of all recommendations it set out.

My Rt hon Friend the Prime Minister has also issued a Strategic Steer which sets clear expectations for the civil, defence, and decommissioning nuclear sectors to accelerate safe and efficient delivery through proportionate regulation and stronger collaboration.

We will present a full implementation plan within three months, taking account of international obligations, national security considerations, and planning, environmental and court processes.

The government is reviewing the system of consumer protection and oversight for home retrofit installations that improve energy efficiency and decarbonise homes. This work is looking at the entire landscape: from how installers work in people’s homes to where homeowners turn for rapid action and enforcement if things go wrong. More information will be shared in the forthcoming Warm Homes Plan.

The government is planning to consult on proposals for retrofit system reform early next year.

Developing domestic supply chains is a government priority, as demonstrated through our Industrial Strategy and comprehensive public financial institution offer which will provide direct support to UK hydrogen supply chains.

DESNZ collects supply chain data through the Hydrogen Allocation Rounds and welcomes the industry’s voluntary 50% local content ambition.

We are developing options to strengthen our approach to domestic supply chains in future allocation rounds and will be launching our HAR3 market engagement exercise setting out our proposals in due course.

Ofgem, as the independent regulator, sets funding and investment allowances for gas and electricity transmission, and gas distribution networks through its RIIO-3 price control process. Final Determinations for RIIO-3 will be confirmed by Ofgem in December.

Ofgem has a statutory responsibility to maintain security of supply while incentivising efficiency and protecting consumers from excessive costs.

Following the energy crisis, Ofgem introduced capital adequacy rules to strengthen the financial resilience of suppliers and the stability of the retail market.

The Department will continue engaging with Ofgem to ensure RIIO-3 delivers the investment needed to maintain energy security through this period.

Ofgem, as the independent regulator, sets funding and investment allowances for gas and electricity transmission, and gas distribution networks through its RIIO-3 price control process. Final Determinations for RIIO-3 will be confirmed by Ofgem in December.

Ofgem has a statutory responsibility to maintain security of supply while incentivising efficiency and protecting consumers from excessive costs.

Following the energy crisis, Ofgem introduced capital adequacy rules to strengthen the financial resilience of suppliers and the stability of the retail market.

The Department will continue engaging with Ofgem to ensure RIIO-3 delivers the investment needed to maintain energy security through this period.

Ofgem, as the independent regulator, sets funding and investment allowances for gas and electricity transmission, and gas distribution networks through its RIIO-3 price control process. Final Determinations for RIIO-3 will be confirmed by Ofgem in December.

Ofgem has a statutory responsibility to maintain security of supply while incentivising efficiency and protecting consumers from excessive costs.

Following the energy crisis, Ofgem introduced capital adequacy rules to strengthen the financial resilience of suppliers and the stability of the retail market.

The Department will continue engaging with Ofgem to ensure RIIO-3 delivers the investment needed to maintain energy security through this period.

Ofgem, as the independent regulator, sets funding and investment allowances for gas and electricity transmission, and gas distribution networks through its RIIO-3 price control process. Final Determinations for RIIO-3 will be confirmed by Ofgem in December.

Ofgem has a statutory responsibility to maintain security of supply while incentivising efficiency and protecting consumers from excessive costs.

Following the energy crisis, Ofgem introduced capital adequacy rules to strengthen the financial resilience of suppliers and the stability of the retail market.

The Department will continue engaging with Ofgem to ensure RIIO-3 delivers the investment needed to maintain energy security through this period.

International cooperation and regulatory harmonisation have the potential to streamline deployment for nuclear energy deployment around the world and help achieve economies of scale.

The UK continues to explore opportunities for regulatory harmonisation in nuclear to speed up the deployment of new nuclear in the UK, demonstrated by the recent Atlantic Partnership for Advanced Nuclear Energy, which builds on existing UK-US collaboration.

ONR as the UK’s independent regulator will need to be satisfied that any design to be deployed in the UK meets UK safety standards and complies with UK law.

Government is offering free inspections of all properties where external wall insulation was fitted under ECO4. Ofgem will contact every household with external wall insulation that has not yet been audited.

Remediation is already taking place to address substandard and unsafe work, and over half of the issues identified to date have been fixed. They will be rectified at no cost to the consumer.

Issues in external wall insulation are substantially higher than those for internal wall insulation. If customers have concerns about the quality of their internal wall insulation, they can contact their original installer or Ofgem’s dedicated helpline.

As of 31 October 2025, the Department for Energy Security and Net Zero had less than five employees on sickness absence for six months or more where the recorded reason related to mental health. The exact number has been redacted to avoid identification of individuals.

The Department records sickness absence reasons in line with Civil Service categories, which include stress, anxiety, depression and other mental health conditions.

The Department offers a range of support including an Employee Assistance Programme, Mental Health First Aiders, and access to occupational health services.

We welcome the industry-led voluntary ambition of 50% UK local content for hydrogen across the value chain from 2030. We will work with industry to introduce monitoring and evaluation to determine the health and success of the supply chain in relation to the existing industry voluntary content ambition, which could include exploring stronger incentives around reporting.

We plan to publish a market engagement exercise setting out our proposals for HAR3 in due course.

We plan to publish our Market Engagement on the Third Hydrogen Allocation Round (HAR3), alongside the updated Hydrogen Strategy, in due course. This will seek feedback on the proposed design and delivery of HAR3 ahead of its intended launch in 2026, as set out in the Industrial Strategy.

The Government knows that, for many consumers, too much of the burden of the bill is placed on standing charges. Ofgem have conducted a broad public consultation to understand the views of consumers on this issue, receiving over 5,000 responses on their 2024 discussion paper. Ofgem judged that if standing charges were fully removed, the fixed costs of the energy system would still need to be recovered, and unit rates would therefore need to increase. In Ofgem's view, this introduced a risk of harm for vulnerable consumers who are high users of energy, often for medical and health needs. Since then, Ofgem have been continuing work in two areas.

Firstly, Ofgem have been working to ensure that domestic consumers can choose tariffs with lower standing charges. Ofgem took a further step towards this goal on 24 July, announcing proposals to require suppliers to offer their customers tariffs with lower standing charges from early 2026.

Ofgem’s consultation on these proposals closed on 23 October, and they will provide a further update in due course.

Secondly, Ofgem have been reviewing how ‘fixed’ costs, which tend to be funded through standing charges, should be recovered in the future energy system. This includes whether those fixed costs could be recovered in more progressive ways, and we are working closely with the regulator on this.

The government recognises that demand for energy efficiency upgrades will remain strong. To bring energy bills down for all, the decision has been made not to continue the Energy Company Obligation when the current scheme ends.

The government has instead committed an additional £1.5bn of grant funding, which will be directed to upgrading low-income households, benefiting those in fuel poverty. The details of this will be set out in the Warm Homes Plan.

The government continues to improve home energy efficiency through schemes, such as the Warm Home: Social Decarbonisation, Warm Homes: Local Grant and the Boiler Upgrade scheme.

Our oil and gas sector significantly contributes towards our economy, and directly employs tens of thousands of highly skilled workers right across the UK.

However, the natural decline of oil and gas in the North Sea has seen more than 70,000 jobs lost in the last decade. On 26 November the Government published its North Sea Future Plan. This sets out how we will protect current jobs in oil and gas, while also securing the next generation of good jobs. This includes a new North Sea Jobs Service to provide end-to-end support for the current workforce to access new opportunities.

The North Sea Transition Authority (NSTA) has published annual Emissions Monitoring Reports since 2021. These contain figures for carbon intensity or emissions intensity (relating to carbon dioxide and methane) of domestically produced oil and gas compared to fossil fuels from other sources, including imported Liquefied Natural Gas. The latest report and methodology can be accessed online:

Emissions Monitoring Report 2025

Emissions Monitoring Report 2025 methodology

To bring domestic energy bills down for all, ECO will not continue when the current schemes end. Government recognises that this is likely to have an impact on some companies in the supply chain.

Government has instead committed additional grant funding of £1.5 billion, which will be directed to upgrading low-income households, benefiting those in fuel poverty. Government will set out the details of this in the Warm Homes Plan.

Government continues to improve home energy efficiency through other existing schemes, such as the Warm Home: Social Housing Fund, Warm Homes: Local Grant and the Boiler Upgrade Scheme.

Details of Ministers' and Permanent Secretaries' meetings with external individuals and organisations are published quarterly in arrears on GOV.UK.

Details of Ministers' and Permanent Secretaries' meetings with external individuals and organisations are published quarterly in arrears on GOV.UK.

We have not seen evidence that material sourced from old growth forests in Canada has been used for UK power generation and Drax has a policy of not sourcing directly from protected Old Growth Management Areas or Old Growth Deferral Areas in British Columbia.

Nevertheless, we have introduced an explicit exclusion for material harvested in old-growth areas in the new contract to eliminate this risk. Any breaches would result in significant financial penalties and could lead to termination of the contract. This will be enforced by enhanced assurance and audit arrangements.

Sustainability criteria require biomass to be legally harvested, and comply with any applicable legislation in the countries of origin to protect primary forest and old growth areas. Old growth sources are not excluded as some jurisdictions permit harvesting for valid reasons, such as fire prevention or disease control.

We have not seen evidence that the bioenergy industry drives harvesting decisions as it accepts low-value residues which would otherwise become waste.

Nevertheless, we have introduced an explicit exclusion for primary material harvested in old-growth areas in the new contract to eliminate this risk.

The EU’s Carbon Border Adjustment Mechanism (CBAM) will enter its definitive regime from January 2026 applies to imports of electricity and certain goods into the EU.

The EU CBAM does not apply in Northern Ireland. Northern Ireland-based power generators are already part of the EU Emissions Trading Scheme in order to maintain the arrangements underpinning the Single Electricity Market. Electricity sent to Northern Ireland from Great Britain is not affected by the EU CBAM.

If businesses are moving electricity to Ireland or elsewhere in the EU, they may need to provide information to their EU-based importer to help them meet their requirements under the EU CBAM. The UK will continue to engage closely with the EU as it finalises the CBAM.

UK businesses should stay informed about developments regarding the EU CBAM, the Department for Business and Trade offers a comprehensive support package through business.gov.uk.

In June 2025, the Government announced a new golden age of nuclear power, which is set to create thousands of high-quality jobs across the UK. As part of this, Great British Energy – Nuclear’s small modular reactor project to be located at Wylfa on Anglesey is expected to create around 3,000 jobs on site at peak construction plus thousands more across the supply chain.

The industry-led Nuclear Skills Plan will support this workforce growth and strengthen partnerships with stakeholders in Wales by launching a Wales Regional Skills Hub in 2026.

Taking action to ensure that our clean energy supply chains are resilient is a key priority as we deliver on our Growth and Clean Energy Superpower Missions.

The Trade Strategy sets out international and domestic trade levers, frameworks and trading relationships to drive growth. The Trade Strategy will support the Clean Energy Superpower Mission by bolstering supply chain resilience and ensuring we have access to the materials we need.

Our Clean Energy Industries Sector Plan announced a new £1 billion Great British Energy supply chain fund, which will catalyse investment into domestic supply chains; supported by a comprehensive offer from the National Wealth Fund, British Business Bank, and UK Export Finance.

Taking action to ensure that our clean energy supply chains are resilient is a key priority as we deliver on our Growth and Clean Energy Superpower Missions.

The Trade Strategy sets out international and domestic trade levers, frameworks and trading relationships to drive growth. The Trade Strategy will support the Clean Energy Superpower Mission by bolstering supply chain resilience and ensuring we have access to the materials we need.

Our Clean Energy Industries Sector Plan announced a new £1 billion Great British Energy supply chain fund, which will catalyse investment into domestic supply chains; supported by a comprehensive offer from the National Wealth Fund, British Business Bank, and UK Export Finance.

Large-scale biomass generators must comply with sustainability criteria which include wide ranging environmental protections regarding biodiversity, legal and sustainable harvesting, maintenance of forest productivity, and social criteria pertaining to indigenous land rights and worker health and safety.

We have enhanced protections under the new contract for difference which takes effect from 2027 and prohibits the use of primary material derived from primary and old growth forests. Any breaches would result in significant financial penalties for Drax and could lead to termination of the contract.

The NWF is the Government’s principal investor and policy bank with operational independence and a total £27.8bn to catalyse private investment in capital intensive projects. The NWF will commit at least £5.8bn over this Parliament to green hydrogen, carbon capture, ports, gigafactories and green steel sub-sectors.

To crowd investment into supply chains, the Government has announced a £1bn Clean Energy Supply chain fund aligned with the Clean Energy Industries Sector Plan and a £4bn British Business Bank Industrial Strategy Growth Capital initiative. DESNZ has also spent around £160m from the now complete £1bn Net Zero Innovation Portfolio on hydrogen R&D.

A secure, diversified supply of critical minerals is vital for the UK's economic growth and security, industrial strategy, and clean energy transition. Within the Modern Industrial Strategy, the Clean Energy Industries Sector Plan highlighted the UK’s existing strengths in critical mineral mining and processing required for clean energy.

The UK government remains committed to further supporting the growth of UK processing capability. The new Critical Minerals Strategy, which has now been published, sets out how we will enhance the UK’s domestic capabilities, optimising domestic production across the supply chain. The Strategy supports delivery of the Industrial Strategy, recognising critical minerals are foundational to growth driving sectors such as clean energy industries.

GBE-N has selected Rolls-Royce SMR as its preferred bidder to partner with to develop the Small Modular Reactor (SMR) project, subject to final government approvals and contract signature, targeted later this year.

Initial site activity at Wylfa will begin in 2026, with the first operational SMRs targeted from the mid-2030s.

Offshore wind provides the UK with secure, domestically generated electricity, and represents a core part of this Government’s mission to make Britain a clean energy superpower – delivering clean power by 2030 and accelerating to net zero.

This Government’s mission-driven approach will maximise the opportunity for economic growth, attracting vital investment to UK coastal communities. This Government estimates that the sector could support up to 100,000 direct and indirect jobs by the end of the decade.

The sector is nascent but is expected to grow significantly; the global hydrogen market could exceed $1 trillion by 2050, with the UK well positioned to capture a substantial share.

We intend to publish a revised Hydrogen Strategy which will include the latest hydrogen jobs estimates and set out plans to optimise the job creation and economic benefits delivered by the UK hydrogen economy.

We will continue to engage with stakeholders across the hydrogen value chain; working together with industry and unions to identify actions that support the skills and workforce needs of the UK’s low carbon hydrogen economy.

The Government is on track to deliver £11.6 billion in International Climate Finance by the end of the financial year 2025/26. To support the most vulnerable who are experiencing the worst impacts of climate change, the Government is also on track to triple funding for adaptation from £500m in 2019 to £1.5 billion in 2025.

The UK’s International Climate Finance has helped 137 million people adapt to the effects of climate change, provided 89 million people with improved access to clean energy, and helped to mobilise billions in private investment.

We cannot comment on individual investment cases, but maintaining a secure energy supply is a key priority for the UK Government. Investment into the energy sector is subject to the highest levels of national security scrutiny, and we will continue to work closely with industry to build secure supply chains and ensure the UK remains one of the most attractive investment destinations in the world.