The UK’s Energy Mix: Understanding the changes

The UK energy mix is continuing to move towards a cleaner, more sustainable power system. Since September 2024, coal has been completely phased out, while renewable energy sources now contribute just under 50% of the UK’s electricity.

We can see from this year’s infographic that whilst the total power generation through the national grid has been steadily declining in recent years; driven by an increase in energy efficiency, onsite generation and shifts in industrial demand, 2024 was very similar to 2023 in terms of overall demand on the grid.

So what do these trends tell us about the UK’s relationship with electricity now and potentially in the future?

Since 2010, the UK’s total electricity generation through the National Grid has declined by approximately 20%, falling from over 325TWh to under 260TWh. there are a few factors that have contributed to this trend:

In 2023, there was a 7% decrease in total power demand/generation compared to 2022. In 2024, however, the overall amount of electricity passing through the grid was almost exactly the same as in 2023. Despite the amount of electricity being generated and consumed being very similar, the emissions were around 18% lower due to a cleaner grid mix.

The last coal-powered plant closed in 2024, marking the end of 142 years of coal-generated electricity, although much of the reduction here occurred by 2023, when only 1% of the UK’s power mix was produced by coal. Before the last coal-powered plant closed, it contributed only 0.6% to the UK’s power mix during 2024.

After a slowdown in 2023, renewable energy generation saw a marked recovery in 2024, increasing by 10% to a total of 121.4 TWh. This not only reflects a positive year-on-year improvement but also signifies long-term progress, with output more than doubling since 2014 – an overall increase of 122%. This includes wind generation surpassing gas, generating 82.54 TWh compared to 72.6 TWh of gas. 

Nuclear power by its very nature is a very stable generation source in that it requires massive investment and takes many years to establish a baseline. Prior to 2024 we had seen some nuclear sites being decommissioned which contributed to the reduced generation from Nuclear. It currently delivers around 15% of the UK’s power mix. 

The ‘other’ portion of the energy mix relates to the interconnectors we use, including imports from countries like France and Germany. In 2024, we saw this rise slightly from 10% to 11% from 2023 figures potentially linked to the conflict with Russia and Ukraine and the disrupted gas flows from Russia which have previously fuelled some of our power generation. 

That just leaves gas; now that coal has been phased out completely, it is having to continue to meet the surplus of demand that nuclear and renewables cannot yet meet. In 2024, electricity from gas production fell slightly from 30% to 27%, due to the rise in renewable generation. We expect this to keep dropping as more of the energy mix comes from renewable sources and taxes on natural gas continue to increase in order to decarbonise the grid even further.

Creating a cleaner energy grid

Scope 2 emissions come from the electricity used from the National Grid and these are a factor of the generation mix and power demand. Between 2009 and 2012, the emissions were higher due to a different mix of fuels on the grid. Whilst the demand for electricity has decreased by ~20% since 2010, the Scope 2 emissions have dropped by over 75% and continue to drop as the grid mix becomes even cleaner. 

The UK has committed to achieving net zero emissions by 2050, with a further target of 95% clean electricity by 2030. Work to transition to a renewable-powered grid is underway, but this will be a complex journey that will take time to achieve. 

As the UK works towards its commitment of 95% clean electricity by 2030, in 2024,  energy generated for the UK had around 18% less emissions compared to 2023.

Over the coming years, UK electricity demand is forecast to rise significantly – from around 325 TWh today to approximately 375 TWh by 2030, with projections suggesting it could exceed 600 TWh by 2050. 

A key driver behind this surge is the ongoing phase-out of petrol and diesel vehicle sales, with electric vehicles (EVs) rapidly becoming the norm. The growing need to charge millions of EVs will place additional pressure on the electricity grid. Similarly, the shift towards low-carbon heating solutions, such as heat pumps replacing traditional gas boilers, alongside broader electrification efforts across various sectors, will further fuel demand. 

Renewable energy deployment, both at grid scale and through onsite generation, is expected to continue accelerating as the urgency to reduce dependency on natural gas intensifies. While nuclear remains part of the long-term strategy, its lengthy build times make renewables the more immediate and scalable solution, particularly as reliance on international interconnectors may pose energy security challenges.

How this affects businesses

Over the next couple of decades, businesses can expect increasing pressure to embrace electrification, driven by a combination of targeted grants, subsidies, and the likely introduction of higher taxation on fossil fuels such as natural gas to shift the financial case in favour of cleaner technologies. We also anticipate further government incentives to boost renewable energy deployment – both for on-site generation and grid-scale projects – though these will likely be funded through rising levies on energy bills.

Additionally, we foresee significant changes around energy flexibility, storage solutions, and pricing structures. As the UK transitions towards a low-carbon grid with less reliance on traditional flexible generation sources, the responsibility for grid stability will increasingly fall on the demand side. Businesses will be encouraged — or required — to provide flexibility, with potential rewards for those who can adapt, and financial penalties for those who cannot.

With these developments on the horizon, it’s crucial for businesses to proactively manage risks while positioning themselves to capitalise on new opportunities. Businesswise Solutions is here to support businesses in navigating these shifts, helping them optimise their energy strategies and stay ahead of industry transformation.

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