[UK] Deck the Grid: Festive Reflections on 2025's Real Estate Reform in the Energy Sector

Last year's Christmas present to the UK energy industry was the Government's Clean Power 2030 Action Plan, gifted on 20 December 2024. Its ambition is to ensure clean power sources generate at least as much power as Great Britain consumes, with 95% of generation coming from clean sources by 2030. The plan sets out the capacity range anticipated for each in-scope technology type needed to achieve the 2030 target and consolidates existing and new actions to be taken across the energy sector to achieve this goal.

2025 was a key year for investors in power projects and infrastructure in Great Britain, with investment being called for at pace and a wave of reforms being introduced across the sector, to achieve the Government's clean energy goals in 2030 and beyond. Amongst many other changes, the industry has seen changes to the Contracts for Difference and Capacity Market schemes, new support being introduced for long-duration electricity storage, zonal pricing being ruled out as part of the Government's Review of Market Arrangements (REMA) process and major reforms to the grid connections process.

This year's most in-demand Christmas present will, for many, be the publication of the outcomes of the Gate 2 to Whole Queue process, which NESO has committed to delivering this week. Connections reform has been a major feature of 2025, with the previous "first come, first served" application process being replaced by a "first ready and needed, first connected" process with gated application windows. Developers with pre-energisation grid connection offers were required to re-apply for firm Gate 2 connections in August 2025. This week, developers will be told whether their project will receive a firm Gate 2 connection offer, which phase of queue allocation they have been sorted into, whether they have protected status and if they have already passed detailed checks.

For those projects which receive Gate 2 outcomes, they will need to await further details of their connection date, point of connection and costs, in 2026. For those which don't receive Gate 2 offers, 2026 will involve a re-examination of project viability and, for viable projects, submission of an application in the first enduring Gate 2 application window (not expected until at least Q2 2026). Developers seeking import connections for electricity demand should also be aware that 2026 is likely to bring further connections reforms for demand. Prioritisation of strategic demand projects, such as data centres in AI Growth Zones, is expected to be introduced amongst other measures (see our article on AI Growth Zones here).

NESO's proposed pathways for the Strategic Spatial Energy Plan (the SSEP), the successor to the Clean Power 2030 Action Plan, are expected in 2026. Several months of delay have recently been announced so government adoption of the final plan may now slip to 2027. The SSEP will become the longer-term GB-wide spatial energy plan for large-scale electricity and hydrogen generation and storage to 2050. It will forecast energy supply and demand characteristics and map potential zonal locations, quantities and types of generation and storage. As the SSEP will replace the Clean Power 2030 Action Plan as the basis on which projects seeking a grid connection are deemed "needed" going forward, its publication will impact on where projects can be developed.

The latter part of 2025 has seen much focus (in planning circles at least) on the course of the Planning and Infrastructure Bill through Parliament and it seems we are due a late Christmas present with the Bill set to receive royal assent and parts of it to start coming into force before the end of the year.  The changes to the pre-application consultation and acceptance stages for Nationally Significant Infrastructure Projects in particular will hopefully lead to quicker pre-application periods, with a focus on meaningful consultation and good quality applications and less time incurred in undertaking unnecessarily precautionary or prescriptive extra work. Guidance is awaited as to what will replace statutory consultation – something else to look forward to in 2026. 

There is more of a question over how effective those parts of the Bill relating to nature recovery and the introduction of Environmental Delivery Plans will be, and this will be something to watch in the upcoming year.

Heading into 2026, the combination of the Planning and Infrastructure Bill changes (with clarity as to consultation requirements), the imminent designation of the revised Energy National Policy Statements, and the outcomes from the Gate 2 process, should all see greater certainty for the consenting and delivery of energy projects, in line with the Clean Power Action Plan 2030. 

With NESO forecasting that twice as much transmission infrastructure will be needed by 2030 as in the past decade, and up to 460,000 km of additional distribution cabling by 2050, we welcomed the Government's July 2025 consultation on proposed reforms to streamline land rights and access processes for electricity network infrastructure – as these have historically caused costly delays. 

The consultation places a particular emphasis on necessary wayleaves (a statutory right allowing electricity companies to install and maintain power lines on private land, even without the landowner's agreement). Key proposals include extending the standard term of a necessary wayleave from 15 to 40 years, requiring landowners or occupiers to provide reasons when serving a Notice to Remove, and supporting the use of virtual hearings.

These proposals, which the government intends to deliver over the next 18 months, represent a step forward but are not transformative. Our "Christmas wish list" for reform includes amending the Electricity Act 1989 to restrict successor landowners from serving a Notice to Remove during the term of a necessary wayleave, thereby preventing repeated applications after ownership changes. Additionally, establishing a definitive registration regime for necessary wayleaves and clarifying ambiguities in existing law would help ensure greater transparency and legal certainty for both network operators and landowners.

The ideal position for both Christmas presents and financiers of technology-led projects is a full wrap. However, for sub-optimally shaped presents (hello wine bottle) and new technology projects – a full wrap can be difficult to achieve (and may not be effort well spent).

A full (technology) wrap promises single point accountability when proprietary technology sits at the heart of a project. In its purest form, your EPC contractor wraps the technology, taking responsibility for proprietary design and equipment as well as its integration with other design, procurement, construction, commissioning and whole of facility performance. Acceptance is tied to minimum performance thresholds, and failure triggers delay and performance liquidated damages, with the potential for make good windows and claw back mechanisms to soften the edges. 

Market reality, however, often points to a partial wrap (think a semi-eaten chocolate orange). Here, the EPC contractor integrates the technology but is only liable for technology failures to the extent it can recover those damages from the selected technology partner. The contractor may be entitled to rely on the adequacy of black box design and specialist equipment, while still carrying overall design coordination risk and the burden of proving that failures stem from the technology. 

This model can work if the technology or partnering arrangements are established (direct rights or tripartite arrangements can give the EPC standing to pursue licensor remedies for as long as it bears performance risk) and the drafting is crisp: clear interface matrices; defined acceptance criteria; targeted LDs; practical make good pathways; and robust IP infringement indemnities. The price is negotiation intensity and potentially longer bid cycles—so if a wrap is the goal, signal it early.

As explored in our ICLG Construction & Engineering Law 2025 chapter, new technology or first-time deployment at scale brings fresh challenges. First of a kind (FOAK) risk profiles, sparse operating data and tight licensor liability postures can make a meaningful wrap economically inefficient or simply unavailable. 

That is where more collaborative and/or unbundled approaches may need to earn their keep. Our experience in 2025 is that projects that deploy well-sculpted risk allocation and targeted remedies, smart pricing structures and incentivisation where appropriate may stand a better chance of success. In some cases, equity participation by delivery partners can better align interests, but they demand careful governance to manage conflicts. Do not expect insurance to backfill the gap for novel technology —underwriting needs data that may not exist.

Where delivery is unbundled, keeping all design “under one roof” with a multi-disciplinary licensor also capable of leading FEED and ongoing design coordination could reduce interface risk and bring the black box owner closer to delivery decisions, even as the client retains more exposure.

For sponsors and lenders on FOAK projects, the discipline is the same: protect continuity and underwrite the gaps. Escrow of critical know how and licence continuity on licensor insolvency or withdrawal are essential.

Where risk transfer and remedies do not provide a complete answer, management strategies, contingency and sponsor support move into focus. The question is not whether a full wrap is “best”, it is whether the chosen team and contract architecture will best deliver the project on time, within budget and to required performance standards.

In 2026, winning strategies for sponsors will include early clarity of objectives when it comes to technology and other key risks, a proper understanding of supply chain approaches to them, skilled navigation of client objectives and market expectations, absolute precision in drafting so that contract terms are in line with requirements, and design leadership and contract management that keeps the black box from becoming a black hole.

2025 has seen Ofgem step into its new role as consumer advocate and redress provider for heat networks in Great Britain. The countdown is now on: full regulatory rules, including Ofgem’s enforcement powers and initial consumer protections, will come into force on 27 January 2026, with full compliance expected by early 2027.

As we approach the end of the year, as we discussed in our podcast on heat networks, landlords and developers would be wise to take stock and future-proof their projects. Key steps include reviewing their properties alongside both planned and existing heat networks. Where developments involve, or will involve, heat networks, reviewing the proposals against the forthcoming technical standards, ensuring metering and billing systems are ready to deliver transparent, consumption-based charges, and preparing governance structures for Ofgem registration and reporting.