UK CEOs say Gas is Surging Amid Low Nuclear Energy Output

Britain's nuclear capacity has contracted by half over the past 10 years, a decline that has forced gas generation upwards and created exposure for businesses managing energy costs.

The country hit 52.5% renewable electricity generation in 2025, the second year above 50%. But official data from the Department for Energy Security and Net Zero shows nuclear output fell 12% to 35.9TWh, while gas generation climbed 4.7% to 91.6TWh. Gas now supplies 31.5% of grid electricity, making it the largest single source. Wind came second at 30%.

Total fossil fuel generation rose 2% year on year. Nearly all of that increase came from gas.

Nuclear decline reshapes energy mix

The figures point to a structural issue beneath the renewable growth story. Wind and solar expand capacity each year, but their output fluctuates with weather conditions rather than demand patterns.

Nuclear functions differently. It can provide consistent baseload power around the clock, much like gas. But the UK's nuclear fleet has aged and capacity has fallen as older plants close and unplanned outages rise across those still running.

Gas turbines have filled the gap. This happens not because fossil fuels remain the preferred option, but because no other technology can respond at the required scale and speed when nuclear plants go offline.

The pattern intensified in the final quarter of 2025. Nuclear output dropped 13% in Q4 to 8.3TWh as outages continued. Analysts expect this trend to persist as the existing fleet nears the end of its operational life.

Price volatility hits business procurement

The shift back towards gas carries environmental consequences, but it also affects the wholesale electricity market in ways that matter to businesses.

John Haw, CEO of energy procurement firm Fidelity Energy, describes the dynamic plainly:

"The record renewable figures are genuinely impressive, but they're masking a problem," he says.

"Every time a nuclear plant goes offline for maintenance or decommissioning, gas turbines spin up to compensate."

"We're building a clean energy system on top of a baseload void and until that void is filled – whether by new nuclear, grid-scale storage or something else – gas isn't going anywhere."

Higher gas use means greater exposure to commodity price swings. Businesses that assumed the grid had decarbonised enough to deliver stable pricing could face unexpected cost increases when gas markets tighten.

"What this means for businesses is that wholesale electricity prices remain far more gas-exposed than the renewable headline figures suggest," John explains.

"A company that thinks the grid is now 'mostly green' and therefore stable may be in for a rude awakening the next time gas prices spike," he adds.

Energy procurement strategies built around the assumption of steady decarbonisation may be underpricing this risk. The baseload gap creates volatility that renewable capacity alone cannot resolve.

New nuclear faces delivery challenges

Most analysts and the UK Government agree that more nuclear capacity offers the solution. But delivery timelines remain uncertain.

Hinkley Point C, the EDF-led plant under construction in Somerset, will not generate electricity until the late 2020s at the earliest. The project has experienced cost overruns and delays for close to a decade. Political commentators like Sara Stefanini have described it as a "headache" for successive governments.

The Labour government has moved to back small modular reactors as a faster and potentially cheaper route to new capacity. GB Energy has struck deals with Rolls-Royce SMR for installations in North Wales.

The approach reflects recognition that traditional large-scale nuclear construction carries risks that have proven difficult to manage in the British context. Whether SMRs can deliver at the pace and scale required remains an open question.

France generates around 70% of its electricity from nuclear power. The French fleet was built over decades of consistent state investment. That capacity now gives France some of the lowest-carbon and most stable electricity prices in Europe.

The numbers from 2025 confirm that Britain's energy transition has made progress, but the baseload gap continues to shape both grid composition and business energy costs.