The United Kingdom (UK) has traditionally been an example for its neighbours and the world in developing ambitious, innovative and effective energy policies.
Beyond its natural local resources (firstly coal, then oil and gas, windy coastlines), it enjoys the presence of big companies, innovative financiers, astute legislators, lawyers and commodity traders, who have set up the highest standards whether in terms of regulatory schemes or financial tools, such as, just to quote one, the Contract for Difference used to derisk private investment.
As the Labour government led by Keir Starmer seeks to reset its relations with the European Union (EU), damaged by Brexit, and the EU seeks partners on defense and upholding multilateralism in increasingly fraught geopolitics, this isa good moment to take stock of the energy developments taking place in the UK, while accounting for existing challenges. Indeed, Brexit so far has not been delivering on its promise of a brighter future outside the EU, with the UK’s gross domestic product (GDP) not looking better than the EU’s over the last five years. However, economic growth was a surprising 0,7% in Q1 2025 and the UK signed a first trade deal with the United States (US) in May 2025.
Key takeaways:
- Energy transition is well engaged in the United Kingdom (UK), with coal phased out, offshore wind poised to replace gas, but also eased by the industrial decline of the country.
- The UK has a strong profile to become a European leader on offshore wind and CCUS (Carbon Capture Usage and Storage), provided conditions are improved and that cooperation with the European Union (EU) is fostered.
- The UK has reduced its GHG emissions by half since 1990 and shows similar renewable energy share in the power sector as the EU. Yet, EU’s and UK’s ETS are increasingly diverging on price and future CBAM schemes may complicate energy relations.
- A stronger UK-EU relationship would help to overcome challenges and to deliver the promises of the energy transition, energy security and industrial competitiveness.
About the Author
Rémy Carbonnier is an independent energy analyst following a distinguished career in energy companies, the French Commission de Régulation de l’Énergie (CRE), and academia as a lecturer. His main areas of interest include strategy, regulation, market design, energy management, and energy services. He holds a degree from École des Mines de Paris and a PhD in management sciences from Université de Strasbourg.