The Energy Transition | UK hits clean energy landmark from renewable generation

This week, we look at the government's confirmation of the renewable energy generation and Ofgem's publication of RIIO-3 licences.

Government confirms renewable energy provided half of the UK's electricity in 2024

UK wind, solar, hydro, and biomass plants collectively generated a record output last year, with renewables providing just over half of the UK's electricity in 2024.

The Department of Energy and Net Zero's (DESNZ) annual Digest of UK Energy Statistics, published on 31 July, confirmed electricity generation from renewable technologies reached 50.4% in 2024, an increase from 46.5% the previous year. In particular, onshore and offshore wind output hit record highs, alongside increases in thermal bioenergy generation and hydropower. Despite lower-than-average sun hours in 2024, meaning solar generation dropped slightly from 2023, solar still delivered its second-highest output on record.

Electricity generation from fossil fuels fell 16%, accounting for just 31.8% of Britain's overall power mix. Oil and gas production is now 34% lower than pre-Covid production levels. This was largely due to the closure of Britain's last coal-fired power plant in September 2024 and reductions in oil and gas production in the North Sea. Of the 31.8% of electricity generated by fossil fuels, 30.4% of this was provided by gas-fired power plants, which remain the UK's biggest power generator despite a 15% drop in output from 2023. However, wind is set to soon overtake fossil gas, comprising 29.2% of Britain's power mix last year. The shift away from fossil fuels highlighted by the report is set to accelerate further over the next few years in pursuit of the government's Clean Power 2030 Action Plan.

The report also sets out that overall UK electricity generation fell 3.1% in 2023, leading to an increased reliance on electricity imports from Europe, with net imports rising by 40% in 2024.

Ofgem publishes RIIO-3 initial licence consultation

Following the previous publication of it's draft determinations, Ofgem has opened a consultation on the RIIO-3 licence conditions and price control financial instruments. The consultation will be a precursor to the full consultation on the implementation of RIIO-3, which will open in December. The changes to the licence conditions will apply from 1 April 2026.  

The consultation applies to the RIIO-ET3 (electricity transmission), RIIO-GT3 (gas transmission), and RIIO-GD3 (gas distribution) but specifically excludes the electricity distribution network as there will be a separate drafting process for this.  

Changes are being proposed to the following licence conditions:  

• Standard licence conditions. These set out the duties and obligations for electricity transmission, gas transmission, and gas distribution licensees from 2026 to 2031. Standard licence conditions (SLCs) cover requirements for system operation, charging methodologies, reporting, financial resilience and compliance to ensure secure, efficient and sustainable network management while supporting investments aligned with net-zero and consumer engagement goals. Ofgem has confirmed that the proposed changes to the SLCs will be limited and therefore a changes document has been published alongside the consultation.
• Standard special conditions. These are applicable only to the gas network (transmission and distribution); again, these will see only minor changes, and a changes document has been provided.
• Special conditions. These apply only to a particular licensee, and relate predominantly to the calculation of allowed revenues. These conditions will see the most substantial changes between RIIO-2 and RIIO-3, and, as such, full condition documents have been provided for each licensee type. 

The consultation is also seeking views on the price control financial instruments (PCFIs) alongside the updated conditions. Two documents accompany the consultation for the PCFIs – these contain further details on variable values and methodologies of calculating allowed revenue.  

The consultation will close on 16 September 2025. To respond, interested parties should complete the consultation response grid and send it to RIIO3@ofgem.gov.uk by the deadline.  

This article was written with the assistance of Adam Budd, Ellie Smyk, Imogen Drummond, trainee solicitors, and Tomisin Agbonifo, paralegal.