How the UK’s energy mix is changing

Renewables surpass 50% of UK electricity for second year running

The UK electricity system crossed a threshold in 2025 that would have seemed improbable a decade ago. Renewables supplied 52.5% of generation across the year, according to official government figures. Gas fell to 28%, nuclear contributed 11%, and net imports made up the remainder. This marks the second consecutive year renewables have exceeded half of all electricity produced.

For businesses managing energy costs and carbon reporting, the shift carries real weight. It means the grid you draw power from is fundamentally different to the one that existed five years ago. Moreover, the change affects everything from wholesale price volatility to the carbon intensity figures you report under Streamlined Energy and Carbon Reporting (SECR) or for tender compliance.

The transformation happened faster than most forecasts predicted. Coal, which generated over 40% of UK electricity as recently as 2012, contributed nothing in 2025. This was the first full calendar year without coal-fired generation in Britain since the 1880s. Meanwhile, wind farms produced a record 87 terawatt-hours (TWh), solar installations generated 19 TWh, and biomass plants added 41 TWh. Combined, renewables delivered 152 TWh overall.

These figures come from Carbon Brief’s analysis of 2025 generation data for Great Britain, alongside official statistics from the Department for Energy Security and Net Zero. The numbers reflect actual electrons on the grid, not capacity or aspiration. Consequently, they show what your business is already buying when you switch on equipment or run a production line.

Wind and solar set new annual generation records

Wind turbines, both onshore and offshore, now form the backbone of renewable electricity in the UK. They generated more power in 2025 than any previous year. Offshore wind in particular continues to expand, with new capacity coming online in Scottish waters and the North Sea. The technology has matured to the point where large offshore arrays operate reliably in challenging marine conditions.

Solar generation also reached a new high, despite the UK’s famously variable weather. Falling installation costs and improved panel efficiency have driven growth across commercial rooftops, ground-mounted arrays, and solar farms. The 19 TWh generated in 2025 represents a substantial increase on prior years, although solar still contributes a smaller share than wind.

Biomass plants, many of which converted from coal, provided steady baseload generation throughout the year. These facilities burn wood pellets and other organic materials, offering dispatchable power that can ramp up or down as needed. However, biomass remains controversial due to questions about lifecycle emissions and forest sourcing. The 41 TWh figure includes output from major plants such as Drax in North Yorkshire.

Nuclear generation declined in 2025 compared to 2024, largely due to planned outages for refuelling and maintenance at ageing reactors. Several of the UK’s existing nuclear plants are approaching the end of their operational lives, and new capacity will not arrive for years. This reduction in nuclear output inadvertently helped renewables claim a larger percentage share, even though total low-carbon generation fell slightly.

Gas remains essential but shrinks as a proportion

Natural gas still plays a critical role in the UK electricity mix. Gas-fired power stations provided 28% of generation in 2025, down from over 40% in recent years. These plants offer the flexibility needed to balance wind and solar output, which varies with weather conditions. When wind speeds drop or solar generation falls overnight, gas turbines can start quickly to maintain grid stability.

For businesses, this means wholesale electricity prices remain linked to gas markets. Even though renewables dominate generation, the marginal price of electricity is often set by gas plants. This pricing mechanism reflects the way the UK wholesale market operates. As a result, gas price spikes still flow through to business energy bills, despite renewables becoming cheaper to run.

The declining share of gas does, however, reduce the UK’s exposure to international fuel markets. Less gas burn means lower import dependency and fewer emissions. It also means the grid’s carbon intensity has fallen sharply, which matters for businesses reporting emissions or bidding for public sector contracts. Under Procurement Policy Note 06/21 (PPN 06/21), suppliers must demonstrate credible carbon reduction plans. Lower grid intensity makes it easier to show year-on-year progress.

The government’s broader energy statistics tell a similar story. The UK sourced 21.7% of total primary energy from low-carbon sources in 2024, up from 20.8% in 2023. Primary energy includes heating, transport, and industrial uses, not just electricity. Therefore, the percentage is lower than the electricity-generation figures, but the direction of travel is consistent. Renewables are growing, fossil fuels are shrinking, and the energy system is decarbonising.

Coal exits the system after more than a century

The disappearance of coal from UK electricity generation represents one of the fastest energy transitions ever achieved by a major economy. In 2012, coal supplied 39% of electricity. By 2020, that figure had dropped to 1.8%. In 2024, coal contributed a fraction of a percent during a few exceptional hours. In 2025, it contributed nothing at all.

This shift was driven by multiple factors. Carbon pricing made coal uneconomic compared to gas and renewables. Environmental regulations tightened emissions limits for coal plants. Meanwhile, renewable capacity expanded rapidly, supported by government contracts and falling technology costs. The closure of the last coal plants, including Ratcliffe-on-Soar, removed the final option for coal generation.

From a business perspective, the end of coal brings two main benefits. First, it lowers the carbon intensity of grid electricity, which reduces your reported Scope 2 emissions. Second, it removes a source of air pollution that affected local communities and created regulatory risk for plant operators. However, it also means the grid has lost a source of dispatchable baseload power, which increases reliance on gas and imports during periods of low wind and solar output.

What the numbers mean for energy costs and carbon reporting

The rise of renewables changes the economics of electricity in several ways. Renewable generators have near-zero marginal costs once built, because wind and sunlight are free. This puts downward pressure on wholesale prices during periods of high renewable output. On particularly windy days, prices can fall close to zero or even turn negative as generators pay to stay connected.

However, the current market structure means gas plants still set the price most of the time. Even if renewables generate 60% of electricity during a given hour, a gas plant providing the final 10% determines what everyone gets paid. This can feel counterintuitive, but it reflects how the merit order system works. Generators are dispatched in order of cost, and the most expensive plant needed to meet demand sets the clearing price.

For businesses, this creates both opportunities and frustrations. You benefit from falling prices during high renewable output, but you remain exposed to gas price volatility. Long-term power purchase agreements (PPAs) with renewable generators can help lock in lower prices and provide budget certainty. They also improve your carbon reporting, because electricity from a dedicated renewable source carries a lower emissions factor than grid-average power.

Carbon reporting requirements continue to tighten. Large companies must publish emissions under SECR. Public sector suppliers face scrutiny under PPN 06/21, which requires carbon reduction plans as part of tender submissions. Many private sector clients also request emissions data from their supply chains. As grid intensity falls, businesses benefit automatically in their Scope 2 figures, even without changing their own operations. However, this also means year-on-year reductions become harder to achieve over time, because the easy gains from grid decarbonisation will eventually plateau.

Grid intensity has fallen, but gas dependency persists

The carbon intensity of UK grid electricity has dropped significantly as renewables have grown. In 2025, the average intensity was lower than in any previous year. This trend helps all businesses reduce reported emissions, particularly those with high electricity consumption in manufacturing, data centres, or cold storage.

Nevertheless, the grid still depends on gas for balancing and backup. Batteries are starting to play a role, but storage capacity remains limited compared to the scale of demand swings. Interconnectors with European neighbours provide some flexibility, but they also introduce exposure to energy markets in France, Belgium, Norway, and elsewhere. When wind output is low across northern Europe, imports become expensive or unavailable.

This dependency creates risk. A cold, calm winter week can push gas demand up sharply, driving wholesale prices higher. Businesses on variable-rate contracts see immediate bill increases. Those on fixed contracts are insulated in the short term, but face higher renewal prices later. Understanding your exposure to these patterns requires looking at when and how you use electricity, not just total consumption.

Key facts about the 2025 electricity mix

• Renewables supplied 52.5% of UK electricity in 2025, the second consecutive year above 50%.
• Wind generation reached a record 87 TWh, with offshore wind providing the majority of output.
• Solar generation hit a record 19 TWh, reflecting continued growth in installed capacity.
• Coal contributed zero electricity for the first time since the 1880s, completing a decade-long exit.
• Gas fell to 28% of generation but remains essential for grid balancing and backup power.
• Nuclear output declined due to planned outages, which helped lift renewables’ share of the total.
• The UK sourced 21.7% of total primary energy from low-carbon sources in 2024, up from 20.8% in 2023.

How this affects compliance, tenders, and supply chain requirements

Public sector procurement rules increasingly require suppliers to demonstrate carbon reduction. PPN 06/21 mandates that bidders for contracts above £5 million must publish a carbon reduction plan. This plan must include Scope 1, Scope 2, and relevant Scope 3 emissions, along with targets and reduction measures. Lower grid intensity helps your Scope 2 numbers, but you still need to show active efforts to cut emissions.

Private sector clients are also demanding emissions data from suppliers. Large manufacturers, retailers, and logistics companies want to understand and reduce their Scope 3 emissions, which include purchased goods and services. If your business sits in someone else’s supply chain, expect requests for carbon footprint information. Having accurate data and a credible reduction trajectory makes you a more attractive supplier.

For companies required to report under SECR, the shift to renewables provides automatic improvement in Scope 2 emissions. However, relying solely on grid decarbonisation is not a strategy. Regulators and stakeholders expect businesses to take direct action, such as improving energy efficiency, installing on-site renewables, or purchasing renewable electricity through PPAs. The falling carbon intensity of the grid is helpful, but it does not replace the need for active management.

Energy audits and carbon footprinting are becoming standard practice. They identify where emissions occur, which processes use the most energy, and where improvements are feasible. For many SMEs, lighting, heating, and compressed air systems offer quick wins. Larger businesses may consider combined heat and power (CHP), electrification of heating, or industrial heat pumps. The right measures depend on your operations, but the data collected during an audit provides the foundation for decision-making.

Planning for a grid that will change further

The transition to renewables will continue. The government has committed to decarbonising the electricity grid by 2030, which requires substantial additional capacity from wind, solar, and nuclear. Offshore wind will bear much of the load, with auctions for new seabed leases and planning reforms to accelerate development. Onshore wind and solar will also expand, particularly on agricultural land and industrial estates.

This means the grid of 2030 will look different again. Gas will play a smaller role, batteries and other storage will become more important, and grid flexibility will matter more than ever. For businesses, this creates both challenges and opportunities. Demand-side response, where companies shift electricity use to times of lower demand or higher renewable output, will become more valuable. Time-of-use tariffs will reward businesses that can adapt consumption patterns.

Electric vehicles and heat pumps will add new demand to the grid, but they also offer flexibility. Vehicle-to-grid technology allows EV batteries to discharge power back to the grid during peak periods. Heat pumps can pre-heat buildings when renewables are abundant, then coast through peak hours. Businesses with fleets or large heating loads can participate in these markets, turning energy use into a revenue stream rather than just a cost.

The policy and regulatory environment will also evolve. Carbon pricing may increase, making emissions more expensive. Energy efficiency standards may tighten, requiring upgrades to buildings and equipment. Support schemes for renewables and storage will come and go, creating windows of opportunity for investment. Staying informed about these changes, and understanding how they affect your business, is part of managing energy risk in a decarbonising economy.

Where to find detailed data and government guidance

The Department for Energy Security and Net Zero publishes comprehensive energy statistics on a quarterly and annual basis. These include generation by fuel type, carbon intensity, renewable capacity, and much more. The data is available at www.gov.uk/government/organisations/department-for-energy-security-net-zero and provides the official record of UK energy trends.

Carbon Brief, an independent climate and energy analysis website, offers detailed breakdowns of generation data and emissions trends. Their annual reviews of UK electricity generation include charts, analysis, and context that help interpret the official figures. You can access their work at www.carbonbrief.org, which remains a trusted source for journalists, policymakers, and businesses.

For carbon reporting guidance, the UK Government’s Environmental Reporting Guidelines explain how to calculate and disclose emissions under SECR and other frameworks. These are available at www.gov.uk/government/collections/environmental-reporting-guidelines. The guidelines cover Scope 1, Scope 2, and Scope 3 emissions, along with intensity metrics and reporting formats.

Businesses looking for support with carbon reporting, energy strategy, or compliance can explore SBS compliance services, which include carbon footprinting, SECR reporting, and PPN 06/21 support. For companies aiming to achieve net zero or demonstrate credible emissions reduction, structured programmes like the SBS net-zero program provide frameworks, tools, and advisory support tailored to SMEs.