Britain’s Energy Transition: Strong foundations, shaky confidence

Britain sits at a pivotal moment in the global energy transition.

On paper, our direction looks promising. Ambitious plans like the Clean Power 2030 strategy aim to quadruple the country’s flexible energy capacity, renewable energy developments are classified under planning policy as National Critical Priority, and regulations like Energy Performance Certificate (EPC) requirements are creating steady demand for cleaner, more efficient energy solutions.

Yet beneath this sense of momentum lies a growing challenge: uncertainty.

Despite strong commitments, whilst 52% of UK businesses have committed to net zero by 2030, 45% risk missing their targets. Confidence is being eroded not by economics but largely by politics. What was once a clear cross-party commitment to climate action is now showing signs of strain. And when the political ground shifts, so does investment.

Comparing our position with the global market

Under the current administration in America, policy rollbacks have brought clarity to market signals. Without relying on subsidies, businesses are investing based on financial performance alone, driving innovation and scale in solutions like virtual power plants. Wood Mackenzie counts over 1,400 virtual power plant deployments across the US and Canada, emphasising platform-based solutions that aggregate multiple revenue streams rather than depending on government support.

The European Union presents a different picture too. Governments have committed hundreds of billions to decarbonisation and are legally bound to deliver results. For example, Brussels has mobilised €300 billion for REPowerEU, backed by binding targets of 42.5% renewables by 2030. Yet even there, green policies are beginning to encounter resistance.

Asia-Pacific markets operate under entirely different constraints. China installed 329GW of solar capacity last year (2024) alone, more than Britain's entire installed generation capacity. But emerging markets require $2.6 trillion annually to reach net zero by 2050, highlighting financing constraints that Britain does not face.

So, where does that leave Britain?

Simply, somewhere in between.

UK businesses still look to government for direction, but the state can no longer afford to subsidise at EU levels. British customers demand more than basic access, they want smarter energy, cleaner infrastructure and measurable results. Here, we have a sophisticated customer base and a mature financial system. What’s missing is sustained political clarity.

Focus on solutions that make sense without relying on subsidies and have proven resilience across political cycles - technologies like energy efficiency, solar and data analytics. Build digital platforms that can flex with policy changes. Above all, be prepared to navigate change.

Britain retains natural advantages in the global energy transition: sophisticated customers, mature markets and established financial infrastructure. But capitalising on these advantages requires acknowledging political reality. The days of betting on regulatory certainty are over. Success demands building businesses that thrive regardless of which party occupies Downing Street.

To discuss how your business can reach its net zero target and remain at the forefront of global change, contact Hannah Sword or David Watson. 

Sources:

edie, The Net Zero Business Barometer – Summer 2021
European Commission, 2022
Solar Power Europe, New report: World installed 600 GW of solar in 2024, could be installing 1 TW per year by 2030, May 2025
BloombergNEF, Emerging Markets Make Headway on Clean Energy Policy and Investment, but Trillions More Needed for Net Zero, BloombergNEF Reveals, November 2024