The Energy Transition | UK Commits Over £2.5 Billion to Fusion Energy as US Partnership Signals Global Momentum

This week we look at the UK and US's landmark fusion energy agreements signed at the Global Fusion Policy Summit, the government's £2.5 billion fusion investment prospectus and the growth of private investment in the sector, and Great British Energy's launch of £30 million in funding for community-owned clean energy projects across the UK.

UK and US sign fusion agreements 

Global Fusion Policy Summit 

At the Global Fusion Policy Summit: 

• the UK Atomic Energy Authority and Princeton Plasma Physics Laboratory signed a joint declaration of intent, formalising a supercomputing partnership; and 
• the UK and US governments released a joint statement committing to closer cooperation in respect of the regulatory framework, aiming to accelerate the development of fusion energy on a commercially viable scale. 

The agreements were accompanied by the announcements of a £2.63 million UK-US collaboration on fusion materials between the University of Birmingham, the Electric Power Research Institute and commercial partners, and of a further £3 million investment by Japanese firm Kyoto Fusioneering in the UK's STEP (Spherical Tokamak for Energy Production) programme, focused on the design of a prototype fusion plant.

The two governments hope that closer regulatory cooperation and knowledge-sharing between the UK and US on fusion will create an internationally consistent framework, that will increase investor confidence and remove potentially onerous hurdles to developing fusion across multiple markets. The UK has already signed collaboration agreements with Canada, Japan, the EU, South Korea and Singapore.

Fusion investment prospectus

The UK government has also published a fusion investment prospectus, building on the fusion strategy it released earlier this year in which it committed £2.5 billion in public funding over the next five years to the nascent fusion energy sector, as reported in March. The prospectus is intended to boost the UK's access to the global fusion market, estimated to be worth between £3 and £12 trillion. In addition, a National Policy Statement (EN-8) will be developed, aimed at streamlining planning permission for developers.

Significant procurement and contracting activity is already in progress, with UK Fusion Energy set up to collate industrial partners and supply chains, to aid the future deployment of commercial fusion plants. 

Great British Energy announces 'People's Power' funding to community clean energy projects

Great British Energy (GBE) has announced the launch of £30 million in funding to support local authorities and community energy groups across the UK, in progressing plans for their own clean power projects. The first instalment of up to £1 billion was committed by the government under the Local Power Plan published earlier this year. 

The projects, ranging from solar panels on community buildings to local wind farms and hydro schemes, will be owned by local community energy groups or local authorities, with the aim of ensuring that the benefits of hosting clean power projects are experienced by the towns and villages in which they are located. The government indicated that it will publish plans this autumn for community energy groups to be offered an ownership stake in renewable energy projects more broadly, creating partnerships between communities and developers. GBE cites the examples of energy markets in Germany and Denmark, where this model of community ownership is already widely used.

The £30 million funding tranche announced this week is comprised of:

• a £20 million Community Fund for organisations across the country to test, develop and build community-owned clean energy assets;
• a £5 million Partnerships Grant to help English local authorities and their community energy partners to "accelerate joint clean energy projects";
• £1.8 million allocated to the Scottish government to back community energy projects across Scotland under the existing CARES programme, which supports communities seeking to develop renewable energy and decarbonisation programmes; and 
• up to £2.9 million to support advice services to help local groups navigate the development of community energy initiatives.

This announcement builds on over £16 million that GBE has provided to Mayoral Combined Authorities in England, which it states has already resulted in 157 new rooftop solar projects being installed across public buildings from fire stations to leisure centres.

The government has acknowledged that community-run energy projects have historically been held back by a lack of funding, advice and government support. The "People's Power" initiative led by GBE aims to make significant progress towards addressing those structural barriers, with community ownership being considered a central pillar of the UK's broader energy transition strategy.

Ofgem consults on its proposed commitment fee for battery projects 

Ofgem is consulting on its "minded-to" decision to impose a new commitment fee on battery storage projects in the grid connections queue, called the Oversubscribed Technologies Commitment Fee (OTCF), in a bid to tackle the oversupply of battery projects competing for grid access by ensuring that capacity is only held by projects serious about progressing. 

According to the regulator, current statistics show Great Britain has approximately 90GW of project capacity operational or in the queue and approximately a further 29GW required by 2035. 

The OTCF would require projects to demonstrate a minimum level of financial commitment, which is proposed to start at £3,000 per MW with a potential incremental increase to £25,000 per MW relative to persisting oversubscription. The National Energy System Operator (NESO) would have responsibility for monitoring oversubscription levels and managing projects' financial securities. 

The proposal forms part of a wider package of measures addressing speculative projects in the connections queue. As previously reported, Ofgem approved the urgent progression of the necessary code modification (CMP470) to facilitate an overcommitment fee, and launched a commitment fee proposal for data centres.

This consultation is open to responses from project developers, electricity generators, and network companies. Any interested stakeholders should submit their response by 5pm on 1 October 2026 to connectionspolicy@ofgem.gov.uk.

This article was written with the assistance of Rani Mandalia, Raihaanah Kulthoom and Luna Panella, trainee solicitors.