Hva som skjedde
Tucked into the energy section of the Budget on 28 October 2026 is a new test for clean power. The Treasury says the government "will ensure that it only procures clean power when it lowers bills overall and can connect to the grid", and that it will procure new generation only where it lowers bills, benefits the system and can be accommodated by the grid. It says the next Contracts for Difference auction, Allocation Round 8, will lower bills, and that rules on constraint management (paying generators to switch off when the network cannot carry their power), system pricing and where generators are built will follow in the government's 10 Year Plan.
The Chancellor, John Healey, put it more bluntly on 31 October 2026. The Times led its front page with his pledge to veto new clean energy projects where the grid cannot cope and the cost would push up bills; as BBC News's review of the papers quotes him, there is "no sense in building power that can't connect and then paying to switch it off". The Times called it a shift from Labour's pledge to decarbonise Britain's power supply by 2030.
To help pay for defence, the same Budget saved £1 billion of capital grant from the Warm Homes Plan, £500 million from hydrogen and £200 million from carbon capture. It kept the Boiler Upgrade Scheme at £400 million in 2027-28, rising broadly with inflation. As Kiran Stacey reported for The Guardian, experts now say Britain is unlikely to hit its clean heating targets; a DESNZ spokesperson told the paper the government remains committed to its heat pump target. We covered the Budget's other energy measures, from the Climate Change Levy freeze to the end of Carbon Price Support, in Budget 2026 for business energy.
Hva det betyr for bedriften din
Bills: a promise, not yet a number. Switch-off payments and the cost of contracts for new generation both end up in the network and policy costs on every business electricity bill. The government says testing each project against bills will bring those costs down. It has not published a figure, and the detail on constraint management comes later, so your unit rate does not change now.
Carbon: the electricity factor may fall more slowly. If you report on the location-based method, as SECR and most carbon reduction plans do, your electricity footprint is your kWh times the government's UK average factor for the year: 0.13096 kg CO2e per kWh for 2026. That factor has fallen over the years as more wind and solar has been built and connected. On NESO's half-hourly data, which our GB electricity generation mix tool summarises,the grid has averaged 141g CO2 per kWh in 2026 so far against 130g in 2025, a reminder that the fall is not automatic: it varies with the weather and with how much gas is burned. Fewer new projects, or projects held back until the grid can take them, would slow the long-term fall. Nobody can yet say by how much.
Targets that lean on the grid. Some net zero and science-based targets assume the grid keeps getting cleaner at its recent pace. If yours does, the electricity part of the plan carries more risk than it did a week ago.
Våre utregnede tall
Take an illustrative business using 100,000 kWh of grid electricity a year. On the 2020 government factor that was 23.31 tonnes CO2e; on the 2026 factor the same kWh is 13.10 tonnes. That is an average fall of 1.70 tonnes a year over 6 years, without the business changing anything.
Every 10g per kWh that the factor stays higher than it would otherwise have been adds 1.00 tonnes CO2e a year to the same business's footprint (10g times 100,000 kWh). Scale it to your own use: 10g per kWh is 1 tonne for every 100,000 kWh.
Hva du bør gjøre nå
- Separate the grid from your own effort. Record kWh every year alongside tonnes, so you can show customers and auditors which part of a fall came from a cleaner grid and which from using less. Our explainer on the UK grid carbon intensity trend shows how the factor has moved.
- Check what your targets assume. If your carbon reduction plan or net zero target relies on the grid factor falling at a set pace, note that assumption in the plan and rerun it with a slower fall.
- Reduce kWh where you can. Efficiency cuts your bill and your footprint whatever happens to the grid. Our kWh to CO2e calculator shows what a saving is worth in carbon.
- If you buy a green tariff or a power purchase agreement, report both methods. Location-based follows the grid; market-based follows your contract. Our post on green tariffs and the two methods explains the difference.
- Planning a heat pump? Boiler Upgrade Scheme grants carry on at current levels for now. You may qualify if you own the building and are replacing fossil fuel heating; check the conditions on GOV.UK before you rely on a grant.
