How the Latest Energy Reforms Impact Commercial Users

From April 2025, several policy and regulatory updates are reshaping the energy landscape for UK businesses. While domestic headlines often focus on household price caps, commercial users are more directly affected by structural changes that impact contracts, billing, compliance, and long-term strategy.

Key Changes Businesses Should Be Aware Of:

Market-wide Half-Hourly Settlement (MHHS) rollout begins The transition to half-hourly settlement is now underway for non-domestic energy users. This reform aims to bring more accuracy and responsiveness to electricity billing, particularly for businesses with variable usage patterns. While the long-term benefits are clear, the rollout may lead to short-term confusion in billing, so it's important to monitor invoices carefully and flag discrepancies.

ESOS Phase 3 action plans expected Although the submission deadline passed in early March, April marks the beginning of the period when businesses are expected to start implementing their energy-saving actions. Those in scope should review progress against their plans and explore support available for recommended efficiency measures.

Zonal pricing under consultation The government has launched consultations on zonal electricity pricing, where rates would vary by region depending on local supply and demand. While this won’t be introduced immediately, the shift could have long-term cost implications - especially for energy-intensive businesses operating in high-demand areas.

Funding and grant opportunities available As part of the UK’s broader Net Zero strategy, substantial government funding is now open to help businesses cut emissions and adopt low-carbon technologies. These include grants for energy efficiency upgrades, on-site renewables, and electrification projects. Businesses are encouraged to apply early before funding rounds close.

Carbon tax policy in the spotlight Commercial energy users should also be aware of ongoing developments in carbon taxation. While no new levies have been announced this April, increasing scrutiny around carbon-related charges - especially in energy-intensive sectors - means that businesses should factor tax exposure into their long-term Net Zero strategies.

Next Steps for Business Energy Strategy

• Review billing data more frequently to catch discrepancies during the MHHS transition

• Prioritise the implementation of ESOS-recommended actions and explore capital allowances

• Stay informed on regional pricing impacts and how they may affect future procurement

• Take advantage of available grants to lower emissions and operational costs

• Consider how future carbon taxation might impact operations, particularly if your footprint is large

April’s policy updates reinforce a key message: businesses that stay ahead of regulatory and pricing shifts will not only avoid disruption, but also find opportunities to reduce costs and lead on sustainability. A proactive approach to energy strategy in 2025 could deliver both environmental and financial returns.