Energy news round-up: July 2026

ESOS Phase 4 rules in force

The ESOS (Amendment) Regulations 2026 came into force on 22 July, and the Environment Agency published its Phase 4 guidance on 30 July. The main changes:

• Display Energy Certificates and Green Deal Assessments are no longer accepted. Organisations must use energy audits and/or ISO 50001.
• Each recommended measure must be reported with its estimated kWh savings.
• Organisations must explain any Phase 3 action plan measures they did not carry out.
• A third progress update is added, due 5 December 2031.
• Organisations fully covered by ISO 50001 no longer need a lead assessor or ESOS report.

VAT on household electricity cut to zero

The government announced that VAT on domestic electricity will fall from 5% to 0% from 1 October 2026 to 31 March 2027, saving a typical household about £45 a year. Business electricity at the standard rate is unaffected, though charities and low-use supplies already on the reduced rate benefit.

British Industrial Competitiveness Scheme: final design

The government’s response to its consultation on the British Industrial Competitiveness Scheme (BICS) set the rules for eligible manufacturers. Firms importing at least 33 MWh a year from the grid can get up to a 100% exemption from Renewables Obligation, Feed-in Tariff and Capacity Market costs. Applications for the first year run from 1 October to 30 November 2026. Accurate consumption data will matter for applicants.

Heatwaves break new ground

The Met Office said 2026 was the first year on record with temperatures of 35°C or more on six separate days, and the first to reach 35°C in three different months.