An energy manager’s guide to funding and policy changes in 2025

An energy manager’s guide to funding and policy changes in 2025

2025 is already shaping up to be a busy year in energy policy – and it could present some great opportunities to drive cost and carbon reduction in your organisation.

Here’s a snapshot of what’s coming up – and make sure to follow us on LinkedIn for regular updates.

1. UK may relink with the EU Emissions Trading Scheme (ETS)

The UK government is exploring the possibility of linking its Emissions Trading Scheme with the EU’s system, according to the Financial Times. Since Brexit, when the EU and UK separated their carbon markets, UK permits have traded at a significant discount to those traded in the EU. At the moment (as of 1 January 2025), businesses exporting to the EU need to align their reporting with the EU’s Carbon Border Adjustment Mechanism (CBAM) methodology.

2. Onsite renewables get a boost

In December, the government unveiled an ambitious Clean Power Plan targeting at least 95% of electricity generation from clean sources by 2030. Key initiatives include doubling current capacities of offshore wind, onshore wind, and solar power, expediting planning processes, and developing 80 new infrastructure projects. A Solar Roadmap (due to be published in spring) will include actions to “unlock” the potential of rooftop solar on warehouse and industrial buildings, plus actions to incentivise solar canopies in outdoor carparks.

3. The electric vehicle (EV) market will continue to grow

The UK has emerged as Europe’s largest market for electric vehicles, with nearly 382,000 EVs sold in 2024, accounting for 19.6% of all new car sales. The government aims for 80% of new car sales to be zero-emission by 2030 and 100% by 2035. Energy managers should prepare for increased EV integration, including the development of charging infrastructure and the potential for vehicle-to-grid applications.

4. Market-Wide Half-Hourly Settlement (MHHS) is coming

From October 2025, all electricity bills will be measured and settled based on half-hourly meter readings, providing a more accurate reflection of energy use. Business will need to upgrade to smart meters, and, in theory, this will allow them to gain greater transparency and save costs by taking advantage of flexibility; i.e. shifting consumption to off-peak periods. Elexon explains more on its website.

4. Get rewarded for reducing consumption – all year round

The Demand Flexibility Service (DFS) launched in winter 2022, providing incentives to households and businesses for reducing or shifting demand. DFS returned for winter 2023/24, and saw even more homes and businesses get involved, with 2.6 million participating.

Launching on 27 November 2024, DFS is back, enabling households and businesses to earn rewards from their registered DFS service provider in return for shifting their electricity usage during DFS events. This time, there are opportunities to participate in the service across the year, rather than just in the winter months. NESO explains here.

5. New Climate Change Agreement (CCA) scheme set to launch

The government has confirmed the reopening of the Climate Change Agreement (CCA) scheme with new opportunities for participation:

• Launch date: January 2026.
• Application window for new entrants: opens May 2025.
• Key updates:
  • Existing participants must reconfirm their eligibility.
  • New industrial sectors may be allowed to join by 2027.

Read more in our blog post.

8. Upcoming changes to EPCs and DECs

The government is consulting on reforms to Energy Performance Certificates (EPCs), Display Energy Certificates (DECs), and Air Conditioning Inspection Reports (ACIRs).

One proposal is to reduce the validity period of EPCs, so that building upgrades, such as fabric changes, can be captured more frequently. This would provide prospective buyers and tenants with more accurate and up-to-date information. At present, an EPC is valid for 10 years.

The consultation also seeks views on the “usefulness” of DECS; whether they are driving energy performance improvements as intended. It asks whether other approaches may be more effective in driving energy performance improvements.

The same consultation also seeks views on revising Air Conditioning Inspection Reports (ACIRs) – to increase compliance.

We’re still waiting on an update regarding changes to the Minimum Energy Efficiency Standards, but expect to hear more on that soon.
Read more in our blog post.

9. Heat Networks Efficiency Scheme (HNES) funding

A new funding round for the Heat Networks Efficiency Scheme is open, with a deadline of March 2025.

The goal is to support the improvement of efficiency in existing heat networks – this may be an opportunity to review heat network performance and identify areas for improvement to access funding. More information is on the government website.

2025 is shaping up to be a transformative year for energy management in the UK, and we’re keeping an eye on what’s next. For advice or support with your energy strategy, get in touch with one of our team.

7th February 2025