DESNZ annual report 2024 to 2025: Performance report (HTML)

Question 1

Performance overview

Accepted Answer

Purpose of the performance overview

The performance overview provides information that allows an understanding of the organisation, its purpose, its performance against delivering its objectives, and both the impact of and management of key risks.

Foreword of the Permanent Secretary

This has been a big year for the department, as we have stepped up delivery to match the ambitions of the new government’s agenda. We founded Great British Energy in July last year, which has partnered with the Crown Estate and launched its headquarters in Aberdeen in September, in line with our Places for Growth programme. We have also launched the Clean Power Mission to deliver clean power by 2030 and accelerate to net zero.

In October we saw the last coal-fired power station close, an important moment in our move towards clean power. We have also seen the pension payments for former mineworkers increase, starting in November. Last year we announced the financial close for the East Coast Cluster of CCUS projects. This groundbreaking deal, unlocking £4bn worth of contracts, means that construction of the UK’s first carbon capture industry started this year. We continue to support investment into new technologies, investing a record £360m into cutting edge fusion energy.

As well as welcoming a new government, we have had some great corporate accomplishments. We are proud that DESNZ saw one of the largest improvements in our People Survey Scores across the Civil Service. We also hosted DESNZ live, a conference which discussed how the department would achieve the Prime Minister’s mission to make Britain a clean energy superpower.

The department has achieved a huge amount this year, of which we can be extremely proud. I am certain that progress will continue in all these areas and more as we work to ensure the secure, clean and affordable energy our country needs.

Jeremy Pocklington
Permanent Secretary and Principal Accounting Officer

Foreword of the Secretary of State

From day one of this government, our department has been moving at speed to deliver the Prime Minister’s mission to make Britain a clean energy superpower. Every family and business in the country is paying the price of Britain’s exposure to the rollercoaster of international fossil fuel markets. In an increasingly unstable and uncertain world, energy security is more important than ever.

That is why we haven’t wasted a moment in our drive for clean homegrown energy that we control. We’ve already consented to enough clean energy to power the equivalent of 2 million homes, lifted the onshore wind ban, delivered a record-breaking renewables auction, set up Great British Energy, kickstarted Britain’s carbon capture and hydrogen industries, and set out plans to make it easier to build new nuclear. In the process, we’ve secured over £40bn of private sector investment in clean energy announced since the General Election.

Now we are taking the next steps by implementing our ‘Clean Power Action Plan’, which will unlock £40bn a year of mostly private investment for the rest of the decade through our reforms to planning, grid connections, renewables auctions, supply chains and skills.

Every wind turbine, every solar panel, every piece of grid infrastructure we construct protects Britain from future shocks, while helping to power growth and create the next generation of good jobs across the country. From blade manufacturing in Hull, new nuclear in Somerset, floating wind off the coast of Scotland and the first CCUS clusters in Teesside and the North West, we are already seeing the clean energy revolution boost investment, revitalise industry and unlock export opportunities across the UK.

As we build an energy system that can bring down bills, our department is doing everything we can to support families and businesses struggling now. That includes bringing forward proposals to expand the £150 Warm Homes Discount to 6 million households next winter, moving ahead on our ‘Warm Homes Plan’ to upgrade millions of homes to make them warmer and cheaper to run, and working with Ofgem to fix our broken energy system and deliver pro-consumer reforms.

I am incredibly proud of the progress our department has made over the last 10 months, but this is just the start. By continuing to drive forward our clean energy mission, we will deliver energy security, lower bills, good jobs and economic growth for the British people today, while working with other countries to deliver climate security for our children and grandchildren.

Ed Miliband
Secretary of State for Energy Security and Net Zero

Our purpose and priorities in 2024 to 2025

Prior to the General Election the department’s priorities were aligned with the previous government’s agenda, as set out in the ‘Powering up Britain plan’.

Since the election the department has had 4 strategic outcomes for our work and the Clean Energy Superpower Mission as a whole:

Enhance energy security
Protect billpayers
Create economic growth for the UK and generate and protect jobs
Reduce the UK’s emissions

Our business model and environment

To deliver our departmental priorities, we:

devise and manage policies, developing expertise on various energy and climate topics, and advising ministers on how to achieve their objectives
deliver public services, implementing the policies decided by ministers for the benefit of citizens
manage taxpayer funds, ensuring financial resources are allocated effectively to deliver public policy goals and implement programmes, while adhering to auditing, reporting, and compliance requirements to demonstrate value for money and proper use of public funds

The core department carries out policy development and delivery via a structured portfolio management approach, that ensures resources are managed and allocated to achieve policy goals effectively and efficiently.

The department also collaborates with and delivers through public bodies, suppliers, local authorities, and regulators to achieve its priorities. DESNZ is supported by Integrated Corporate Services (ICS), which provides a range of corporate and support functions to DESNZ and other departments.

In our policy development and implementation, we engage with a diverse range of stakeholders, including businesses of all sizes, business representative organisations, unions, research institutions, citizen groups, and direct engagement with the public.

Organisational structure

The diagram below shows the groups that made up our organisational structure. The groups are headed by Directors General (DGs). DG groups are formed of several directorates.

The corporate delivery group is overseen by a Chief Operating Officer (COO) function. This is run by the Second Permanent Secretary, with the support of the Chief People Officer and Chief Finance Officer. This group provides corporate services, support and expert advice across DESNZ. Integrated Corporate Services (ICS) provides enabling services to a number of departments and is hosted within DESNZ.

Organisational structure: diagram data

DGs:

Energy Markets and Supply
Net Zero Buildings and Industry
Net Zero, Nuclear and International
Energy Infrastructure
Chief Scientific Adviser
Central Functions and retained Corporate Services

Supported by Integrated Corporate Services (ICS).

Our group

The Department for Energy Security and Net Zero Group is made up of the core department and its arm’s length bodies (ALBs) which are a combination of non-departmental public bodies (NDPBs) and companies.

Departmental group

These bodies are within our accounting boundary and are consolidated into the group accounts.

The departmental accounting boundary is similar to the concept of a group under International Financial Reporting Standards (IFRS) but is based on control criteria used by the Office for National Statistics (ONS) to determine the sector classification of the relevant sponsored bodies. The statistical guidance defines control as the ability to determine general corporate policy and this can be exercised through the appointment of directors, control of over half of the shareholders’ voting power, through special legislation, decree or regulation. The difference between the public and private sector classification of the institutional units is determined by where control over the organisation lies, rather than by ‘ownership’ or whether or not the entity is financed from public funds. Classification as public or private can therefore require judgement and ONS processes are designed to ensure that these judgements are appropriate, consistent and internationally comparable.

See note 26 of the financial statements on page 233 for the full list of consolidated entities. For those excluded below, they are separate legal entities, but their accountability flows from the entities listed in this section.

Non-Departmental Public Bodies:

Civil Nuclear Police Authority
Climate Change Committee1
Committee on Fuel Poverty
Committee on Radioactive Waste Management
Mining Remediation Authority (formerly Coal Authority)
Nuclear Decommissioning Authority
North Sea Transition Authority
UK Atomic Energy Authority

Companies:

British Nuclear Fuels Limited
Bulb Energy Ltd
Electricity Settlements Company Ltd
Enrichment Holdings Ltd
Great British Energy
Great British Nuclear (known as Great British Energy – Nuclear from June 2025)
Low Carbon Contracts Company Ltd
Net Zero North Sea Storage Ltd
Salix Finance Limited
Sizewell C Limited
Sizewell C (Holding) Limited

Notes:

Body not consolidated on materiality grounds

During 2024-25 the department successfully negotiated with strategic partners in the Oil and Gas Industry to establish a Carbon Capture, Usage and Storage (CCUS) Transport and Storage Company (T&SCo) – Net Zero North Sea Storage Limited, with the aim to facilitate the deployment of carbon dioxide transport and storage infrastructure. The deployment of CCUS infrastructure is expected to contribute to the achievement of carbon targets and budgets, and to economic growth in the United Kingdom’s industrial heartlands, including a just transition for the industries operating on the United Kingdom Continental Shelf.

T&SCo is an incorporated joint venture between BP, Equinor, and TotalEnergies who provide the private capital to deliver the project. Once operational, the financing model for T&SCo will be based on the Regulated Asset Base (RAB) financing model with government support provided where needed to ensure the model’s finance-ability. T&SCo received a licence under section 7 of the Energy Act 2023 which renders it eligible to receive an Allowed Revenue, recouped through system charges paid by users of their network. This provides them with long-term revenue certainty and is also paired with additional government support in the form of a Government Support Package and Revenue Support Agreement, mitigating significant cross-chain and leakage risks.

The agreed model with the additional government support mentioned above has been subject to a decision by ONS to provisionally classify T&SCo to the central government sub-sector. As a result of this, the costs incurred (and capitalised) by T&SCo are consolidated onto the DESNZ group balance sheet, even though the department and the public sector has no ownership or direct control over the company. At the time of laying these accounts, ONS have not yet released their final decision on the classification of T&SCo, but on the instruction of HM Treasury we have consolidated on the basis of the interim classification decision.

Wider departmental group

The Department for Energy Security and Net Zero has policy responsibility for 2 public corporations, a non-ministerial department and a central government fund, which are not consolidated in the group accounts.

Public corporations:

National Nuclear Laboratory Limited
National Energy System Operator Limited*

Central government fund:

Nuclear Liabilities Fund

Non-ministerial department:

Office of Gas and Electricity Markets

Notes:

*National Energy System Operator Limited (NESO) is a new addition to the DESNZ group in 2024‑25. Please see note 11.1 for more detail

Performance summary on priority outcomes

This section summarises some of our biggest achievements during 2024-25. See performance on priority outcomes in the performance analysis section for more details on performance, including metrics.

Spending Review

The Chancellor of the Exchequer presented the long-awaited multi-year Spending Review to Parliament on Wednesday 11 June covering day-to-day expenditure for the next 3 years and investment spending over 4 years.

Key headlines for DESNZ included:

A confirmed capital budget of £62.8bn from 2025-26 to 2029-30 which provides a 5-year funding plan and represents a 16% average annual growth rate
A confirmed resource budget of £7.6bn from 2025-26 to 2029-30
£8.3bn capitalisation for Great British Energy and Great British Nuclear (to be known as Great British Energy – Nuclear from June 2025). This includes over £2.5bn for Small Modular Reactors
£14.2bn for Sizewell C, the first new British-owned nuclear power station in 30 years
£13.2bn for the ‘Warm Homes Plan’ to improve people’s homes and cut their bills
£9.4bn for carbon capture projects, supporting the delivery of Track 1 clusters in Teesside and Liverpool Bay, as well as developing 2 new projects in Scotland (Acorn) and Yorkshire (Viking)

This is a historic settlement. It enables DESNZ to press forward on delivery of this government’s priorities, progressing Sizewell C and Small Modular Reactors, as well as funding 2 more carbon capture projects in Scotland and Yorkshire, and further funding for the development of nuclear fusion. These are new technologies that have never been seen before at this scale.

Our administration budget is reducing by 10% in real terms by 28-29 (from £425m in 25-26 to £402m in 28-29) in line with the Spending Review settlement. It is expected to reduce further by 15% in real terms (to £387m) by 29‑30 as per the agreed profile from our admin target delivery plan. This will be delivered partly through steady reductions in our core DESNZ workforce, achieved through careful management of staff turnover and voluntary exit schemes in both 25-26 and 26-27, for which we will receive an additional £2.5m from the transformation fund in each of these years. There is also a commitment to reduce spend on consultancy and professional services.

Efficiency, savings and productivity will also play a central role in delivering our admin profile across future years, with specific initiatives across a variety of workstreams. These include the streamlining and standardising of digital platforms and processes, such as grant management or contact centres used by DESNZ schemes, and investment in office-based AI tools (such as Microsoft 365 Copilot) with training for the workforce in using such tools, plus targeted interventions to fully embed and exploit AI. We are planning to transform our overall operating model, including how corporate functions interact with each other, policy groups and ALBs to further unlock efficiencies. We will continue to drive efficiency through automation and consolidating processes which we have already begun through Integrated Corporate Services and we intend to use this model to continue to prevent duplication of services and functions going forward.

Enhance energy security

In the first week of this government, we removed the de facto ban on onshore wind. We are committed to radically increasing onshore wind energy by 2030 – there is currently around 15.45GW of onshore wind in the UK (Q1 2024), accounting for roughly a quarter of all electricity generated from renewables. We have also established an Onshore Wind Industry Taskforce to co-ordinate action across the system
We have launched our ‘Clean Power 2030 Action Plan’ which set out a detailed plan for achieving the target of clean power by 2030. That means 43-50GW of offshore wind, 27-29GW of onshore wind, and 45-47GW of solar power, significantly reducing our fossil-fuel dependency, and reforming the grid connections process to align with the plan and deprioritise speculative projects. Growing our clean energy system in this way will see once-in-a-generation levels of energy investment – an estimated £40bn on average per year between 2025-2030
We have consented to unprecedented amounts of nationally significant solar power (2GW) by approving 4 major solar farms. This reflects the government’s ambition to generate more solar power by 2030
We have published an update to market on the midstream gas system, setting out how we are planning to ensure that during the transition to Net Zero, our natural gas system remains resilient and affordable, and in the longer term there is a fair and orderly transition away from gas when and where it’s no longer needed
We have set up Great British Energy, a publicly owned company that will drive forward the government’s ‘Plan for Change’ and clean energy superpower mission which, alongside Great British Nuclear, is backed by £8.3bn

Protect billpayers

We launched the ‘Warm Homes Plan’ which will help people find ways to save money on energy bills and deliver warmer, cleaner to heat homes, with up to 300,000 homes to benefit from upgrades next year. DESNZ is overseeing around £3.2bn of investment in warmer homes across 2025 to 2026 from government, social housing providers and supplier obligations
We launched the first comprehensive review of the energy regulator. The review will establish Ofgem as a strong consumer champion, driving up standards for household and business consumers both now and as energy use evolves with smarter and greener technology
Over 100,000 miners across the country received a 32% increase to their pensions after the government ended a historic injustice ensuring fair payouts for years to come

Create economic growth for the UK and generate and protect jobs

We gave researchers developing cutting-edge fusion energy a record £360m investment, helping to kickstart economic growth as part of government’s ‘Plan for Change’. Five construction and engineering bids have progressed to the next round of the UK Industrial Fusion Solutions competition to deliver the prototype fusion energy plant by 2040, driving progress towards the commercialisation of fusion in the UK to supply families and businesses with secure, clean and unlimited energy
We signed contracts to launch the first CCUS projects in the UK, at the East Coast Cluster in Teesside and Hynet in Merseyside. These will support thousands of jobs across the North East and North West. The recent commitment to back carbon capture industries with £9.4bn will ensure the vision for CCUS becomes a reality
The Chancellor announced in October that the new National Wealth Fund will add £5.8bn to the UK Infrastructure Bank’s existing £22bn capitalisation and re-affirmed support for the clean energy mission as a core objective in its Statement of Strategic Priorities published in March. The Prime Minister announced in February that the National Wealth Fund will provide £200m of investment to new opportunities in Grangemouth as part of a major intervention to ensure the long-term future of the industrial site. The funding will be available for co-investment with the private sector to help unlock Grangemouth’s full potential and secure our clean energy future
We launched new investment to support clean energy manufacturing and highly skilled jobs in industrial towns and cities through the Clean Industry Bonus Scheme and an initial £300m investment for offshore wind supply chains through Great British Energy

Reduce the UK’s emissions

We held the sixth Contracts for Difference auction (2024), which awarded contracts to a record number of new clean energy projects across Great Britain. This included the Hornsea 4, which Ørsted have since announced will be discontinued in its current form. Auction Round 6 (AR6) secured record solar capacity (3.3GW), representing a 20% increase to the UK’s installed capacity
We helped reached a new climate finance goal at COP29 in a historic moment for tackling climate change. The agreement reached sets a new goal of $1.3tr for developing countries by 2035 from all sources (public and private), and within that, a core goal for public and publicly mobilised finance of at least $300bn. The new goal also recognises new contributions from major economies (like China) who are in a position to support developing countries
Britain became the first major economy to stop burning coal for power in October 2024, with the closure of the country’s last coal-fired power station at Ratcliffe-on-Soar, following 50 years of service

Adverse events

Substandard Insulation:

Routine checks carried out by Trustmark, the independent body which oversees tradespeople working in homes, uncovered examples of substandard solid wall insulation fitted since 2022 under the Energy Company Obligation 4 and Great British Insulation Scheme Adverse events
As soon as these issues were identified, the department took immediate steps to confirm appropriate action was being taken. Installers have been swiftly suspended (by Trustmark and certification bodies), expanded checks of solid wall insulation measures installed under both schemes have taken place, and a comprehensive plan is in place to begin an immediate repair process
We instructed the energy regulator, Ofgem, to take oversight of this work to ensure it is swiftly delivered. Ofgem have now written to all the households affected, explaining that qualified professionals have started a system of checking every installation under these schemes
Installers responsible for this substandard work should fix this at no cost to households and will remain suspended from working on any government insulation scheme if they do not fulfil their obligation to put any issues right
The department is reviewing at pace, measures undertaken on homes under other energy efficiency schemes (including the Local Authority Delivery, Social Housing Decarbonisation Fund and Home Upgrade Grant schemes) to determine any potential issues, which includes undertaking on-site visits to help provide a complete picture
Despite the changes we have already made to increase oversight and provide clarity on responsibilities, we acknowledge that the system of protections currently in place is still fragmented and confusing, with too many organisations having different roles and responsibilities. We are committed to overhauling the system to drive up consistent quality and protect consumers through the ‘Warm Homes Plan’

Heathrow Power Outage:

Late on 20 March 2025, a large fire broke out at North Hyde Substation resulting in the loss of supply to 66,919 customers, including Heathrow Airport, which was non-operational on 21 March. The investigation has concluded, and the cause is not thought to be suspicious
Alongside Ofgem, the Energy Secretary commissioned the National Energy System Operator (NESO) to investigate the power outage impacting Heathrow and the surrounding area, and to understand any wider lessons to be learned on energy resilience for critical national infrastructure
Heathrow Airport Holdings Limited published the Kelly Review report on 28 May, which notes central conclusions on decisions taken following the outage, as well as preparedness and resilience of the airport as a whole. Findings from this report will be taken into consideration in the NESO full review
The department continues to implement internal lessons from North Hyde including:
- reviewing the Critical National Infrastructure knowledge base
- adding newly identified critical sites
- working with DfT on policy options to improve airports power resilience

Macroeconomic conditions:

Global factors such as inflation, supply chain constraints, interest rate rises, and wider geopolitical shifts are impacting investor appetite for clean energy projects around the world. This could have an impact on the amount of investment that the UK is able to attract. This year, a number of companies who have significant investments in the UK, such as BP, Shell, Equinor, Corio, RWE, SSE and Ørsted, have announced they are cutting back planned investment in renewable energy projects across their global portfolios. In the UK, Ørsted has announced the discontinuation of the Hornsea 4 offshore wind project off the Yorkshire coast
We are working to ensure that the UK can continue to compete for, and win, investment from around the world. The UK has strong investible opportunities due to a combination of long-term policy signals, world leading financing mechanisms, transparent market frameworks, and targeted public investment. For instance, we are ensuring that instruments such as the Contract for Difference remain attractive to investors whilst ensuring value for consumers

Principal risks

The department manages longer-term strategic risks and threats, either related to our core departmental commitments such as meeting the carbon budgets and maintaining energy security, and other more functional risks around information security, staffing and policy design. The key risks faced by the department are summarised below. For further details on our risks, see risk profile in the performance analysis.

1. Underlying energy supplies (gas/electricity/fuel) and/or the resilience of the energy system are disrupted or undermined due to a disorderly energy transition

2. Failure to meet our legally binding net zero commitments and interim climate targets (carbon budgets)

3. Failure of the UK to provide leadership and active international engagement

4. A reduction in, or delay to, net zero private sector investment

5. Unaffordable energy bills – gas price rises

6. Disruption to supplies of gas/electricity/fuel to meet near-term demand

7. Catastrophic or severe incident affecting energy or nuclear critical national infrastructure

8. Sensitive information is compromised or lost through cyber-attack (such as a ransomware attack), eavesdropping, theft, mistakes, or leaks

9. Potential of insufficient funding creates a risk that financial constraints could limit our ability to deliver our objectives and ambitions

10. Public Sector Equality Duty – systematic non-compliance

11. Structural gaps in the current and future workforce

12. Departmental Morale, Engagement and Wellbeing

Where we spent our money

Departmental Expenditure Limit (DEL) is the controllable budget issued by HM Treasury on behalf of Parliament to deliver our strategic objectives. It excludes Annually Managed Expenditure (AME) which represents volatile, demand-led spend and technical accounting matters. These categories are explained in the financial review section of the annual report and accounts.

In 2024-25, total DEL spend for the departmental group is shown in the diagram below. Major areas of spend are also shown by estimate line for the core department, and by entity for arm’s length bodies.

Where we spent our money in 2024-25: diagram data

Major areas of spend	Group	Value (£m)
NDA	ALBs	£2,975m
Ensuring our energy system is reliable	Core	(£1,933m)¹
Sizewell C	ALBs	£1,672m
Taking action on climate change	Core	£1,450m
Delivering affordable energy	Core	£880m
Net Zero North Sea Storage	ALBs	£439m
Capability	Core	£412m
UKAEA	ALBs	£396m
Managing our energy legacy	Core	£175m
Mining Remediation Authority	ALBs	£80m
Science and research	Core	£74m
Salix	ALBs	£32m
Great British Nuclear	ALBs	£26m
Other ALBs	ALBs	£25m
Total	-	£6,703m

Notes:

Negative expenditure relates to repayment of Bulb loan

Question 2

Performance analysis

Accepted Answer

Structure of the performance analysis

The performance analysis provides a detailed narrative of our performance and includes the following sections:

our performance (against strategic priorities)
risks affecting delivery of our priorities
financial review
sustainability report
performance in other areas

Performance on priority outcomes

See the performance summary section for an overview of our biggest achievements during 2024-25. This section summarises delivery against the core metrics for each of our outcomes.

Enhance energy security

The UK’s dependence on fossil fuels left us vulnerable to unstable energy prices and that energy insecurity was exposed by Russia’s invasion of Ukraine. By producing the clean energy we need at home, and being more efficient in how we use it, we can boost our energy independence and end our reliance on foreign dictators.

We will continue working closely with key partners to make sure our system is safe, secure, and resilient by design. While fossil fuels remain necessary, we will ensure that supply remains reliable, secure, and affordable, and that the transition away from them is fair and orderly.

Metric	Description	Source	Rationale
Loss of Load Expectation forecasts (hours)	Represents the number of hours per year in which, over the long-term, it is statistically expected that supply will not meet demand	NESO Winter Outlook Published, updated annually	Provides a comparable quantification of electricity security of supply. Gives an indication of how likely it is for the National Energy System Operator to take emergency action, such as reducing voltage or implementing some demand disconnections. This aligns with the department’s ambition to continue working closely with system operators, ensuring security of supply and the resilience of our energy system
N-1 Infrastructure Standard	The N-1 infrastructure test simulates the failure of the largest single piece of infrastructure and assesses whether the remaining gas system can continue to meet demand without interruption. The result is shown as a percentage, for example if the value is 110%, this means that on a peak demand day, there would still be 10% more supply than needed, even with that failure	National Gas Winter Outlook Published, updated annually	The N-1 test is a critical assessment used by National Gas to evaluate the resilience and reliability of the gas transmission network. This aligns with the department’s ambition to continue working closely with system operators to ensure security of supply and the resilience of our energy system
Fossil Fuel Demand as a Percentage of Total Energy Demand	Captures the proportion of total energy demand that comes from gas and oil	DUKES Published, updated annually	Lower reliance on fossil fuels translates to less dependency on volatile fossil fuel markets, allowing our energy system to be price secure. This aligns directly with the government’s Clean Energy Superpower Mission of transitioning to a diverse, secure future energy system

Loss of Load Expectation:

Year	Loss of Load Expectation (hours/year)
2024-25	<0.1
2023-24	0.1

Source: ‘Electricity System Operator Winter Outlook Report 2023-24’

Release schedule: Annual

Loss Of Load Expectation represents the number of hours per annum in which, over the long-term, it is statistically expected that supply will not meet demand, and the National Energy System Operator (NESO) will need to take emergency action, such as reducing voltage or implementing some demand disconnections.

LOLE was below 0.1 hours in 2024-25, compared to 0.1 hours in 2023-24, ie. for the year 2024‑25, it supply was statistically expected that supply would not meet to fall short of demand for less than 0.1 hours.

N-1 Infrastructure Standard:

Year	N-1 Infrastructure Standard
2024-25	112%
2023-24	119%

Source: The N-1 infrastructure test simulates the failure of the largest single piece of gas infrastructure and assesses whether the remaining system can continue to meet peak demand without interruption. The N-1 Infrastructure Standard score has not been published by National Gas since 2022. However, the methodology for calculating this is provided in the ‘UK National Risk Assessment on Security of Gas Supply 2022’. The calculation involves adding the maximum technical capacities for UK’s supply sources (domestic production, imports via Norway and the EU, storage and LNG) and taking away the impact of a failure of the UK’s single largest gas infrastructure (100km Felindre pipeline connecting the South Hook and Dragon LNG terminals at Milford Haven to the NTS). This is then divided by the 1-in-20 peak day demand for the winter ahead and multiplied by 100 to arrive at the N-1 percentage score. We used the methodology provided and the latest values for maximum technical capacities and peak day demand from the NGT Winter Outlook 2023-24 to arrive at the N-1 score for 2023. The calculation has been approved by NGT.

The N-1 infrastructure test yielded scores of 119% in 2023-24 and 112% in in 2024-25, which would represent an expected 12% surplus in supply if the largest piece of gas infrastructure were to fail, on a peak demand day in 2024-25.

UK fossil fuel dependency 2019-23 (%):

Year	UK fossil fuel dependency 2019-23 (%)
2023 (difference vs 2022)	76.8% (-1.5%)
2022 (difference vs 2021)	78.3% (+0.3%)
2021 (difference vs 2020)	78.0% (+1.0%)
2020 (difference vs 2019)	77.0% (-2.3%)
2019 (difference vs 2018)	79.3% (-0.6%)

Source: DESNZ Digest of UK Energy Statistics (DUKES): Energy, Table 1.1.1.C: Inland consumption of primary fuels and equivalents for energy use, percentage shares on an energy supplied basis.

Fossil fuel dependency (comprising of coal, manufactured fuels, primary oil, petroleum products and natural gas) is calculated as the sum of primary demand for fossil fuel divided by the sum of primary demand for all fuels. Primary demand is defined as the sum of transfers, transformation, energy industry use, losses and final consumption less non-energy use.

UK fossil fuel dependency dropped to 76.8% in 2023, down 2.5 percentage points since 2019.

The metrics provided were the most up to date available at the time this report was compiled.

Protect billpayers

Families are still gripped by the worst cost-of-living crisis in a generation. Building a diverse energy system based on renewables and nuclear will help to protect consumers from future price shocks.

Metric	Description	Source	Rationale
Average household gas and electricity bill	This shows the average annual gas and electricity bill for the typical dual-fuel household, and a gas and electricity breakdown	DESNZ Annual Domestic Energy Bills Published, updated quarterly Next update expected after publication	This is a useful metric to show cost to households of gas and electricity. This assumes average gas and electricity consumption for households using gas for heat. Households using other heating systems than gas boilers (for example, heat pumps or electric heaters) are not represented by this metric
Number of households in fuel poverty	Fuel poor households are defined as having a fuel poverty energy efficiency score below band C and disposable income below the poverty line after accounting for housing and energy costs	Fuel Poverty Statistics Published, updated annually Next update expected after publication	This is the metric used to define fuel poverty according to the Low-Income, Low Energy Efficiency definition (LILEE). It is also used to report progress against the government’s statutory fuel poverty target for England. The metric is effective at measuring progress at alleviating structural, long-term fuel poverty because it is not subject to major changes following energy price fluctuations (like the 10% affordability metric)
10% metric	This shows how many households are required to spend over 10% of their income, net of housing costs, on energy	Fuel Poverty Statistics Published, updated annually Next update expected after publication	This is different to fuel poverty but is widely accepted as a measure of energy affordability. Variants of this metric are used to define fuel poverty in Wales, Scotland and Northern Ireland
Average gas price for industrial users (across all size bands)	This shows the average gas price for industrial users, across all consumption bands	Industrial energy price statistics Published, updated quarterly Next update expected after publication	This shows the average price of gas and electricity for the average non-domestic user. Businesses differ greatly in terms of energy consumption, and energy prices change depending on consumption levels (energy intensive, medium, and small businesses). Some energy intensive users also benefit from exemptions, which lower their energy costs
Average electricity price for industrial users (across all size bands)	This shows the average electricity price for industrial users, across all consumption bands	Industrial energy price statistics Published, updated quarterly Next update expected after publication	This shows the average price of gas and electricity for the average non-domestic user. Businesses differ greatly in terms of energy consumption, and energy prices change depending on consumption levels (energy intensive, medium, and small businesses). Some energy intensive users also benefit from exemptions, which lower their energy costs

Average household dual-fuel total, electricity and gas bills (£):

Year	Average household dual-fuel bill, total	Average household electricity bill	Average household gas bill
2024	£1,728	£983	£745
2023	£2,051	£1,086	£965
2022	£1,903	£1,008	£895
2021	£1,286	£744	£542
2020	£1,211	£676	£535
2019	£1,200	£649	£551

Source: DESNZ Annual Domestic Energy Bills (tables 2.2.5 and 2.3.5) Published, updated quarterly

This shows the average annual household dual-fuel total, electricity, and gas bills, based on average annual consumption in a dual-fuel household. The average annual household dual-fuel bill has dropped to c. £1,730 in 2024, but remains significantly higher than levels seen before the energy crisis.

Fuel poor households in England (LILEE) and Households required to spend more than 10% of after housing costs (AHC) income on energy:

Year	Fuel poor households in England (LILEE)	Households required to spend more than 10% of AHC income on energy
2025 (projection)	2.78m (11.2%)	7.38m
2024	2.73m (11.0%)	8.99m
2023	2.80m (11.4%)	8.73m
2022	3.18m (13.1%)	6.66m
2021	3.16m (13.1%)	4.93m
2020	3.16m (13.2%)	4.30m
2019	3.18m (13.4%)	4.11m

Source: Fuel poverty annual statistics (27 March 2025).

Fuel Poverty in England is measured using the Low-Income Low Energy Efficiency (LILEE) indicator. A household is fuel poor if it has a disposable income after housing costs and required fuel costs below the poverty line and lives in a home that has a Fuel Poverty Energy Efficiency Rating (FPEER) below Band C.

While not the official measure of fuel poverty in England, an additional affordability metric has been published by DESNZ for England showing the number of households required to spend more than 10 per cent of their income after housing costs on household energy.

Approx, 11% of households in England were estimated to be fuel poor in 2024, with the figure projected to increase slightly in 2025. Nearly 9 million households were required to spend over 10% of their income after housing costs on energy in 2024. This figure is expected to decrease to c. 7.4 million in 2025.

Average electricity and gas prices for industrial users (across all size bands), including Climate Change Levy:

Quarter ending	Average electricity price for industrial users (across all size bands), p/kWh)	Average gas price for industrial users (across all size bands), p/kWh)
March 2025	25.9	5.5
December 2024	25.5	5.5
September 2024	25.7	5.3
June 2024	26.0	5.4
March 2024	27.8	6.3
December 2023	28.4	6.4
September 2023	28.3	5.9
June 2023	26.9	6.1
March 2023	25.4	7.2
December 2022	24.8	6.0
September 2022	22.2	6.7
June 2022	19.3	5.0
March 2022	18.1	4.2
December 2021	17.7	4.2
September 2021	13.9	3.1
June 2021	13.6	2.6
March 2021	14.8	2.5
December 2020	14.2	2.5
September 2020	12.9	2.3
June 2020	13.4	2.4
March 2020	14.3	2.6
December 2019	14.0	2.5
September 2019	12.4	2.4
June 2019	12.3	2.4

Source: Industrial energy price statistics (table 3.4.2) Published, updated quarterly

This shows the average price of gas and electricity for the average non-domestic user.

Businesses differ greatly in terms of energy consumption, and energy prices change depending on consumption levels (energy intensive, medium, and small businesses). Some energy intensive users also benefit from exemptions, which lower their energy costs.

Average electricity and gas prices for industrial users have fallen since the energy crisis, but remain at a high level compared with pre-crisis levels. In the quarter to March 2025, the average price was 25.9p/kWh for electricity and 5.5p/kWh for gas.

Create economic growth for the UK and generate and protect jobs

There is a need to drive growth and productivity with skilled, well-paid jobs, particularly in our industrial heartlands. Through investing in a huge wave of clean energy projects, we can drive growth with new supply chains and infrastructure and creating hundreds of thousands of skilled jobs across the UK.

Metric	Description	Source	Rationale
UK low carbon and renewable energy employment	Number of FTE employees in a low-carbon and renewable energy sector	Low Carbon and Renewable Energy Economy (LCREE) Survey Published, updated annually	This is a survey-based estimate of employment in a low carbon and renewable energy sector among a list of 17 pre-defined sectors in the survey. The Low Carbon and Renewable Energy Economy (LCREE) survey is the primary source of official information on LCREE activity in the UK. The survey only collects data on direct LCREE activity and not indirect activity (that is, the additional activity in the economy generated because of demand for the products of LCREE-active firms, the wages they pay to employees, or the increase in demand for the inputs used by businesses directly active in the LCREE)
UK low carbon and renewable energy turnover	Turnover from economic activity in a low-carbon and renewable energy sector	Low Carbon and Renewable Energy Economy (LCREE) Survey Published, updated annually	This is a survey-based estimate of employment in a low carbon and renewable energy sector among a list of 17 pre-defined sectors in the survey. The Low Carbon and Renewable Energy Economy (LCREE) survey is the primary source of official information on LCREE activity in the UK. The survey only collects data on direct LCREE activity and not indirect activity (that is, the additional activity in the economy generated because of demand for the products of LCREE-active firms, the wages they pay to employees, or the increase in demand for the inputs used by businesses directly active in the LCREE)
UK annual energy transition investment	This provides data on total investment into low-carbon industries, which enables the tracking of high-level investment trends	BNEF energy transition investment dataset Unpublished	This dataset is an annual review of global investment in the low-carbon energy transition. It covers a wide scope of sectors central to the transition. The report also tracks investment in the clean energy supply chain

Total low carbon and renewable energy economy jobs:

Time period	Direct employment in low carbon and renewable energy economy (LCREE) in the UK and constituent countries
2023 (difference vs 2022)	314,300 full-time equivalents (FTEs) (11.5% increase from 2022)
2022 (difference vs 2021)	281,900 full-time equivalents (FTEs) (11.8% increase from 2022)

Source: ONS Publication of the LCREE Survey

This is a survey-based estimate of employment in a low carbon and renewable energy sector among a list of 17 pre-defined sectors in the survey. The Low Carbon and Renewable Energy Economy (LCREE) survey is the primary source of official information on LCREE activity in the UK.

The survey only collects data on direct LCREE activity and not indirect activity (that is, the additional activity in the economy generated because of demand for the products of LCREE-active firms, the wages they pay to employees, or the increase in demand for the inputs used by businesses directly active in the LCREE)

The data in this table was the most recent available at the time this report was compiled. The 2025 release, from which this information was taken, was based on data from 2023

Total low carbon and renewable energy economy exports:

Time period	Direct turnover in low carbon and renewable energy economy (LCREE) in the UK and constituent countries
2023 (difference vs 2022)	£10.8bn (18.7% increase from 2022)
2022 (difference vs 2021)	£9.1bn (1.1% decrease from 2021)

Source: ONS Publication of the LCREE Survey

This is a survey-based estimate of employment in a low carbon and renewable energy sector among a list of 17 pre-defined sectors in the survey. The Low Carbon and Renewable Energy Economy (LCREE) Survey is the primary source of official information on LCREE activity in the UK.

The survey only collects data on direct LCREE activity and not indirect activity (that is, the additional activity in the economy generated because of demand for the products of LCREE-active firms, the wages they pay to employees, or the increase in demand for the inputs used by businesses directly active in the LCREE)

The data in this table was the most recent available at the time this report was compiled. The 2025 release, from which this information was taken, was based on data from 2023

UK annual energy transition investment:

Time period	Energy transition investment, £bn
2024	51.1
2023	58.1
2022	31.5
2021	29.8
2020	29.6

Source: DESNZ analysis of Bloomberg NEF Energy Transition Investment, 2025. These figures have been converted into GBP using OECD exchange rates. Values are expressed in nominal terms. Investment figures reported for the UK refer to CAPEX spending on projects that are based in the UK. BNEF measure investments when a final investment decision (FID) is reached, which means there is a time lag between investment announcements and BNEF’s figures

UK annual energy transition investment was £51.1bn in 2024, down from £58.1bn in 2023 but significantly higher compared to the early 2020s. Figures are expressed in nominal terms and don’t account for inflation

Reduce the UK’s emissions

The climate crisis gets more urgent by the day. If we don’t show leadership now, we face an unstable future marked by food shortages, extreme weather and mass migration. Through leading the way on Net Zero domestically, we can inspire global climate action and protect the planet for future generations.

Metric	Description	Source	Rationale
UK territorial greenhouse gas emissions & UK territorial greenhouse gas emissions, sector breakdown	Measures the progress of the UK territory in reducing overall GHG emissions in million tonnes of CO2 equivalent both in terms of outturn emissions and projected emissions against targets	UK greenhouse gas emissions statistics Published, updated annually	These are the main statistics on domestic greenhouse gas emissions. They are helpful in tracking emissions reduction progress over time
Low carbon power generation as a share of GB consumption	This metric is used to track progress against the ‘Clean Power Action Plan’ generation target – By 2030 clean sources produce at least as much power as GB consumes in total	Energy Trends: UK electricity Dec 2024 Supply and consumption of electricity, table ET5.2	In line with independent advice from the National Energy System Operator (NESO), our clean power target means transitioning to an electricity system with the following characteristics in a typical weather year: – Clean sources produce at least as much power as Great Britain consumes in total, and – Clean sources produce at least 95% of Great Britain’s energy generation
Low carbon share of electricity generation	This metric is used to track progress against the ‘Clean Power Action Plan’ generation target – By 2030 clean sources produces at least 95% of GB’s generation	Energy Trends: UK electricity Dec 2024 Fuel used in electricity generation and electricity supplied, table ET5.1	In line with independent advice from the National Energy System Operator (NESO), our clean power target means transitioning to an electricity system with the following characteristics in a typical weather year: – Clean sources produce at least as much power as Great Britain consumes in total, and – Clean sources produce at least 95% of Great Britain’s energy generation
Grid emissions intensity (gCO2e/kWh)	This metric is used to track progress against the ‘Clean Power Action Plan’ target – Emissions intensity of well below 50gCO2e/kWh by 2030	DUKES Estimated carbon dioxide emission intensity of electricity supplied, table 5.14	In line with independent advice from the National Energy System Operator (NESO), our clean power target means transitioning to an electricity system with the following characteristics in a typical weather year: – Clean sources produce at least as much power as Great Britain consumes in total, and – Clean sources produce at least 95% of Great Britain’s energy generation

Total UK greenhouse gas emissions (million tonnes CO2 equivalent):

Time period	Total UK greenhouse gas emissions (million tonnes CO2 equivalent)
2024 (difference vs 2023, provisional)	371.4 (-3.5%)
2023 (difference vs 2022)	385.0 (-4.9%)

Source: DESNZ Final UK greenhouse gas emissions national statistics: 1990 to 2023, Table 1.1. DESNZ Provisional UK greenhouse gas emissions national statistics 2024, Table 1a. Excludes emissions from the UK’s share of international aviation and shipping

UK territorial greenhouse gas emissions by sector, 2023, mtCO2e (% of total territorial emissions):

Sector	UK territorial greenhouse gas emissions by TES sector, 2023, MtCO2e (% of total territorial emissions)
Power	43.9 (11.4%)
Fuel supply	30.1 (7.8%)
Domestic transport	111.8 (29.0%)
Buildings	78.5 (20.4%)
Industry	53.1 (13.8%)
Agriculture	46.6 (12.1%)
Waste	19.9 (5.2%)
Land use, land use change and forestry (LULUCF)	1.1 (0.3%)

Source: DESNZ final UK greenhouse gas emissions national statistics: 1990 to 2023, Table 1.2

Emissions are provided for Territorial Emissions Statistics (TES) sectors. The TES sectors have been introduced this year to replace the National Communication (NC) sectors that were used in previous publications.

Domestic transport, buildings and industry are the largest sectors in terms of emissions, accounting for over 60% of UK territorial greenhouse gas emissions in 2023.

Low carbon power generation as a share of GB consumption (%):

Time period	Low carbon share of electricity generation (%)
2024	58.1
2023	55.7
2022	57.1
2021	50.7
2020	56.0

Source: Energy Trends: UK electricity, March 2025, Fuel used in electricity generation and electricity supplied, table ET5.1.

This is the correct reference for the ‘closest official statistic’ published alongside the headline metrics in the ‘Clean Power Action Plan’ in December. The precise methodology and definition for the official statistics for these headline metrics is currently under review.

Low carbon share of electricity generation (%):

Time period	Low carbon share of electricity generation (%)
2024	65.0
2023	60.3
2022	56.3
2021	54.8
2020	59.3

Source: Energy Trends: UK electricity, March 2025, Fuel used in electricity generation and electricity supplied, table ET5.1.

This is the correct reference for the ‘closest official statistic’ published alongside the headline metrics in the ‘Clean Power Action Plan’ in December. The precise methodology and definition for the official statistics for these headline metrics is currently under review.

Grid emissions intensity (gCO2e/kWh):

Time period	Grid emissions intensity (gCO2e/kWh)
2023	172
2022	192
2021	199
2020	179

Source: DUKES, estimated carbon dioxide emission intensity of electricity supplied, table 5.14

The emissions intensity of the GB electricity grid has decreased since 2020, dropping to 172 gCO2e/kWh in 2023.

The data above was the most recent available at the time this report was compiled.

UN Sustainable Development Goals

The Sustainable Development Goals (SDGs) were agreed by UN member states – they consist of 17 goals for 2016–2030, which are fundamental to social, environmental and economic development.

List of UN SDGs:

Goal 1: No poverty
Goal 2: Zero hunger
Goal 3: Good health and well-being
Goal 4: Quality education
Goal 5: Gender equality
Goal 6: Clean water and sanitation
Goal 7: Affordable and clean energy
Goal 8: Decent work and economic growth
Goal 9: Industry, Innovation, Technology and Infrastructure
Goal 10: Reduced inequality
Goal 11: Sustainable cities and communities
Goal 12: Responsible consumption and production
Goal 13: Climate action
Goal 14: Life below water
Goal 15: Life on land
Goal 16: Peace, justice and strong institutions
Goal 17: Partnerships for the goals

Departments are required to identify in their ARAs where their performance contributes to the SDGs. DESNZ contributes directly to SDGs 7, 9 and 13. The table below provides a summary, with more details in the performance narrative above.

UN SDGs	DESNZ Performance
Goal 7: Affordable and Clean Energy Ensure access to affordable, reliable, sustainable, and modern energy for all.	DESNZ Work Strands: Clean Power by 2030 is the first pillar of the Clean Energy Superpower Mission. Specific outputs include: – Set up Great British Energy – Secured record pipeline of clean cheap energy projects through Contracts for Difference Allocation Round 6 – Clean sources produced 60% of the UK’s power generation in 2023 – Published the ‘Clean Power 2030 Action Plan’ – Tackling fuel poverty – Drafting of an Energy Independence Bill
Goal 9: Industry, Innovation and Infrastructure Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation.	DESNZ Work Strands: – Launched Industrial Energy Transformation Fund Phase 3 – Investment in the industries of the future, such as CCUS and Hydrogen – Building clean energy industries into the Industrial Strategy – Supported R&D through the Net Zero Innovation Portfolio
Goal 13: Climate Action Take urgent action to combat climate change and its impacts.	DESNZ Work Strands: Accelerating to Net Zero is the second pillar of the Clean Energy Superpower Mission. Specific outputs include: – Delivering clean power by 2030 – Continued rollout of the ‘Warm Homes Plan’ – Building clean energy industries into the Industrial Strategy

Risk profile

The department has a highly challenging agenda, including several first-of-a-kind projects, which creates a higher risk environment. To properly manage this, DESNZ adopted a portfolio management approach in September 2024. Programmes and projects undertake first line risk management, identifying and mitigating risks to their local delivery, but Portfolio Boards now sit above them to undertake assurance of programme risk management and to take ownership of risks which need a broader mitigation approach. The portfolios also own and manage those risks that impact across multiple programmes and thus need a co-ordinated response. Where risks sit across multiple portfolios or where the portfolio cannot mitigate the risk on their own, escalation to the departmental strategic risk register is then considered.

Detail of the risks managed by the Executive Committee through the departmental strategic risk register, as well as their mitigations, are set out below. Further information on how Executive Committee managed these risks is included in the governance report.