The UK's energy sector is set for significant changes in 2025. With clear targets for clean power energy generation by 2030, the government's Clean Power Action Plan outlines a detailed strategy for reducing carbon emissions from power generation, increasing renewable energy capacity, and modernisation of the grid network, whilst also ensuring energy security and economic prosperity.

Wind Energy

The onshore and offshore wind sectors are set for remarkable growth in 2025, bolstered by the recent removal of the de facto ban on onshore wind in England and changes to the National Planning Policy Framework. The UK government has set bold targets to double onshore wind capacity from 15 to 30GW by 2030, positioning wind as a key driver of electricity decarbonisation.

There continues to be technological advancements in the sector, with onshore commercial turbine capacities increasing from around 2MW to 7MW machines, featuring larger hub heights and rotor diameters. While this represents a significant increase in energy generation potential, it also presents new design and locational challenges. For instance, modern onshore commercial turbines may require a minimum stand-off distance of over 800 metres from third party residential properties to meet noise limits, compared to much smaller stand-off distances in the past.

Repowering opportunities for existing onshore commercial wind farms and medium scale wind turbines is becoming increasingly attractive, allowing operators to upgrade older turbines with more efficient modern machines while utilising existing infrastructure and grid connections. In the case of medium scale wind turbines, the risk of losing government tariffs has also been removed due to the changes in the Feed-in Tariff regime to allow for repowering.

Solar

The solar sector is undergoing a dramatic transformation, particularly large-scale ground-mounted solar farms. While previous solar schemes developed under government tariffs were typically under 5MW, schemes are now being developed subsidy free due to technological advancements and declining costs, with sub 50MW projects becoming commonplace, which can be determined at local authority level. There has also been an increase in private wire prospects, with schemes proposed to generate electricity for on-site or nearby high energy users, subject to a power purchase agreement between the generator and the offtaker.

As investor confidence has grown and opportunities have been identified to connect at transmission level, Nationally Significant Infrastructure Project (NSIP) scale solar farms are now being progressed. The Labour Government has already shown commitment to such schemes, approving five NSIPs since being in administration, a 100% consent rate by UK Energy Secretary Ed Miliband for these large-scale solar projects. The solar farms, proposed in Lincolnshire, Nottinghamshire, Rutland and Suffolk, will collectively generate almost 2.9GW of power alone. These decisions have shown a practical approach to development, with projects proceeding even where Best and Most Versatile agricultural land is present, provided agricultural uses can continue alongside solar generation.

Several key trends are shaping the solar sector:

• Co-location is gaining momentum, with developers proposing to combine solar installations with battery storage, and in some cases hydrogen electrolysers to maximise returns.
• Agrivoltaics is emerging as a potential option to balance energy generation with agricultural production, given the food versus energy security debate.
• The proposed changes to the planning regime and the planning thresholds in England are expected to streamline the consenting process for projects.

However, the solar sector faces several challenges:

• Grid capacity constraints and the need for suitable land near connection points.
• Growing competition for land use between food production and energy security.
• Local opposition to developments in some locations impacted by schemes, particularly NSIPs.

Battery Energy Storage

The battery energy storage market has evolved significantly over the past decade, becoming a key component in balancing electricity supply and demand. Systems in the development pipeline now range from 10MW to 1GW, targeting a range of revenue streams. There is currently 4.9GW of installed capacity, with the UK forecasted to have around 30 to 35GW of battery energy storage capacity by 2030.

The market faces challenges, with increasing competition between schemes, complex revenue streams, and oversupply. At present, the battery energy storage pipeline currently far exceeds the offered capacity, which is resulting in investment uncertainty and project attrition. However, battery energy storage does have a key role to play in the shift towards clean power generation and ensuring security of supply, and NESO has stated that suggested capacity limits can be exceeded.

Going forwards, long-duration flexibility is a key area of focus, with a move towards long duration electricity storage. While traditional battery storage systems (like lithium-ion) are excellent for short-duration energy storage, long-duration storage is becoming increasingly important as the grid integrates more renewable energy, especially wind and solar.

Investment in Hydrogen

Hydrogen is emerging as a vital component in the UK's decarbonisation strategy, aligned with the UK Hydrogen Strategy's goal of establishing 5GW of low-carbon hydrogen production capacity by 2030. The focus is increasingly on green hydrogen, produced via electrolysis using renewable electricity.

Key developments include:

• Government funding for hydrogen initiatives
• Development of a Hydrogen to Power business model
• Establishment of an H2P expert working group
• Design of new business models for hydrogen transport and storage infrastructure

However, challenges remain, particularly around production costs, with green hydrogen currently more expensive than conventional hydrogen produced from natural gas.

Grid Connections

2025 marks a crucial year for grid connection reforms. Comprehensive changes are being implemented at both transmission and distribution level to accelerate grid connections.

Historically the connections process has been based on a “first come, first served” basis. With the connections queue now in excess of 750GW, and projects blocking progress, this is no longer tenable. Connections reform, under “TMO4+”, introduces the “first ready, first connected” approach, and built on the milestones process introduced to grid connection offers in 2023. The idea is to strengthen the need for projects to demonstrate viability, ensuring only feasible, committed projects can remain in the queue.

The new process will be fully implemented this year and re-ordering of the queue is expected to significantly change the position with connections, freeing up grid capacity that cannot be utilised, prioritising projects that are ready to progress, and improving connection timescales. The new criteria will also result in early stage projects losing their place in the queue.

Whilst there is uncertainty around the pipeline versus the required capacities, the changes to the connections process is also creating new opportunities for landowners to own and operate their own schemes on site, with distribution grid connection applications below set thresholds no longer being caught by transmission restrictions. However, the reforms also place greater financial commitment requirements on applicants, emphasising the need for careful planning and investment strategies.