A quick note from me (Josh):
Welcome to The George Briefing. Each week, my co-founder Lu and I use our tech-focused lens to go directly to the source of change in the UK energy market, the official publications from Ofgem and the UK Government. Our goal is to cut through the noise and deliver the key regulatory developments and changes that will impact your business's bottom line, all explained in simple, actionable terms.
This weeks developments are:
The EV Honeymoon is Over: New pay-per-mile tax planned for business fleets
Decoding the 'Sizewell C Charge': A new 'pay-as-it's-built' cost is coming to your energy bill
Stuck in the 'Connection Queue'? Ofgem is finally tackling the gridlock holding back business growth
This Week's B2B Market Pulse
Hidden Gems Also Worth Reading
LATEST DEVELOPMENTS
The Guardian
Image source: Gemini / Meet George
The Spark: The era of tax-free driving for electric vehicles is coming to an end, forcing businesses to recalculate the long-term cost of their commercial fleets.
The details:
The UK government is reportedly planning a new pay-per-mile tax for electric vehicles, proposed at a rate of 3p per mile.
The new charge is intended to offset the loss of revenue from traditional fuel duty as more drivers switch to EVs.
If introduced, the scheme would likely start in 2028, by which time up to 6 million EVs are expected to be on UK roads.
For an average driver, this new tax could add an estimated £250 per year on top of existing road taxes.
Why it matters: This isn't just a new tax; it's the end of the honeymoon period for EV adoption. For years, the business case for switching your fleet to electric has been supercharged by tax incentives like the absence of fuel duty. This proposal signals that as EVs become mainstream, the government will treat them like any other vehicle from a tax perspective. The real-world impact for your business is a fundamental shift in the Total Cost of Ownership (TCO) calculation. While EVs will likely still be cheaper to run, the financial gap between electric and petrol/diesel will narrow, meaning procurement decisions made today need to account for this future, guaranteed cost increase from 2028.
What you can do:
Update your fleet cost models: If you're planning to purchase or lease EVs, immediately factor a 3p-per-mile running cost into your financial projections for all years post-2028.
Review lease agreements: For any EV leases that will extend beyond 2028, check the contract terms to understand who is liable for new government-imposed road charges.
Investigate telematics: This tax will require accurate mileage tracking. Start evaluating telematics and fleet management software now to get ahead of the curve on monitoring these future costs.
Department of Energy Security and Net Zero
Image source: Gemini / Meet George
The Spark: The government has green-lit a new funding model for the Sizewell C nuclear plant that will see a new charge appear on business energy bills during its construction, years before it generates any power.
The details:
The Sizewell C nuclear power station will be funded using a Regulated Asset Base (RAB) model.
This model allows the project to collect revenue from electricity suppliers during the construction phase, not just after it's operational.
Revenues will be collected from suppliers by the Low Carbon Contracts Company (LCCC), the same body that manages Contracts for Difference.
Ofgem, the UK's independent energy regulator, will oversee the RAB structure and associated costs.
Why it matters: What does 'Regulated Asset Base' actually mean for your business? In simple terms, it's jargon for 'you pay as it's built'. Unlike previous projects where developers shouldered the construction risk, the RAB model shifts some of that risk onto all bill payers. This means a new, unavoidable charge will be added to the non-commodity portion of your energy bill to fund Sizewell C's construction over the next decade. While the government's aim is to lower the overall cost of financing and boost UK energy security, the immediate real-world impact for your business is a new line item on your P&L that you'll need to budget for long before the power station is actually operational.
What you can do:
Ask your current energy supplier or broker when they expect the 'Sizewell C RAB charge' to first appear on invoices and what the estimated cost per kWh will be.
When reviewing new fixed-term energy contracts, ask specifically how this new charge will be treated – will it be included in the fixed rate or passed through at cost?
Factor a small, incremental increase for new non-commodity costs into your energy budget forecasts for the next 5-10 years.
Ofgem
Stuck in the 'Connection Queue'? Ofgem is finally tackling the gridlock holding back business growth
Image source: Gemini / Meet George
The Spark: Regulators are finally stepping in to clear the gridlock for new high-demand electricity connections, a major bottleneck holding back business expansion across the UK.
The details:
Since late 2024, there has been a sharp, unexpected surge in applications for new, large-scale electricity connections.
This is creating a massive backlog, delaying viable business projects that are ready to connect and stimulate economic growth.
In response, Ofgem and the National Energy System Operator (NESO) are launching reforms to manage the connection queue.
The plan is to filter out speculative applications, fast-track viable projects, and prioritise connections deemed strategically important.
Why it matters: What's the real-world impact here? This isn't just bureaucratic shuffling; it's a direct threat to business growth. The UK's grid connection process is broken, and speculative projects - often for data centres or battery storage - are clogging the system. This means a real-world manufacturing firm or logistics hub ready to invest and create jobs can be stuck waiting for years just to get power. Ofgem's move to 'curate the queue' is an admission that the first-come, first-served system has failed. For any business planning a major expansion, securing a grid connection has now become a critical operational risk that can derail your entire project timeline and budget.
What you can do:
If your business is already in the queue for a new connection, ensure you respond to NESO's 'call for input' to prove your project is viable and ready to proceed.
Planning a project that needs a new or upgraded connection? Engage with your local Distribution Network Operator (DNO) immediately to understand the real-world timelines and how these reforms might affect your application.
Ask your DNO or consultant what evidence you'll need to provide to be classed as a 'priority' or 'viable' project under the new rules to avoid being pushed to the back of the queue.
LATEST MARKET NUMBERS
⚡ B2B Market Pulse
Wholesale Electricity Price (weekly avg.): 6.03 p/kWh (➖ 0.00 p/kWh / 0.0%) This is flat against last week's 6.03 p/kWh.
Wholesale Gas Price: 2.77 p/kWh (➖ 0.00 p/kWh / 0.0%)
This is flat against last week's 2.77 p/kWh.UK Carbon Price (UKA): £55.68 per tonne (📉 -£0.83 / -1.5%)
A modest but helpful drop from last week's £56.51/tonne.Wind + Solar Generation (Share of UK Mix): 39.5% (📉 -16.8 pts / -29.8%)
This is a significant 16.8 percentage point drop from last week's 56.3% share.
The Meet George Take
If last week was about renewables testing the price floor, this week is a perfect demonstration of what sets the actual price.
The data tells a story of two opposing forces cancelling each other out. Renewable generation collapsed by nearly 30%, falling from a massive 56.3% share to just 39.5%. In theory, this should have sent electricity prices spiking as the grid was forced to fill the gap with more expensive thermal (gas-fired) power.
But the price didn't move. It held perfectly flat.
This is the key insight for your business: the price remained stable because the cost of the replacement power was also stable. The wholesale gas price—the fuel for those thermal plants - was unchanged, and the carbon price (the tax on that fuel) even fell slightly, effectively neutralising the cost of dispatching them.
This reveals the two-part reality of the UK market:
Renewables (wind/solar) dictate day-to-day volatility.
Gas + Carbon prices dictate the core price level that the volatility moves around.
This week, the "volatility factor" (weather) was negative, but the "core price factor" (gas) was stable, resulting in a flat market. It's the clearest signal you can get that for long-term budgeting, the gas and carbon markets are the ones that truly matter.
ALSO ON OUR RADAR
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