US – UK Energy Collaboration

Following hot on the heels of the King’s Speech, which featured energy security prominently in the King's Speech, leading US and UK energy companies have recently met with Jonathan Brearley, Permanent Secretary at the UK Department for Energy Security and Net Zero (DESNZ) in Washington. Topics under discussion were the future of transatlantic energy cooperation and the role of business in strengthening energy security, affordability, and economic growth.

Whilst energy policies in the US and the UK differ markedly, a new paper produced by British American Business (BAB), argues forcibly that there are three core areas where enhanced collaboration can deliver tangible opportunities for transatlantic investment.

Market Diversification

Whilst the UK energy policies are centred on a clean energy transition, and the US on “energy dominance” (maximising domestic production of oil, gas, liquified natural gas (LNG), and critical minerals, while also supporting nuclear and emerging technologies), both prioritise energy security by supporting domestic supply and market diversification. Nuclear power, however, is seen as a critical pillar to a diversified and resilient energy system in both counties. Advanced low-carbon energy solutions are being developed at speed in the form of Small Modular Reactors (SMRs) and Advanced Modular Reactors (AMRs). Regulatory approval is, however, slow, expensive and cumbersome as highlighted in the UK by John Fingleton (see report here). The UK Government’s announcement in the King’s Speech for a Nuclear Regulation Bill will sweep aside many of the regulatory blockers described in the Fingleton report. Measures announced in the Bill include a focus on smarter regulations, but also importantly, use of international standards and regulatory recognition to reduce bespoke UK requirements. This chimes with the BAB’s focus on the goals announced in 2025 by the UK Office of Nuclear Regulation (ONR) and US Nuclear Regulatory Commission to cut duplication and fast-track decisions in reactor and site licensing, share the regulatory load between countries, accelerate second-jurisdiction reviews and progress technologies that are ready to enter the regulatory process in the UK and the US.

BAB also highlights the joint US/UK potential for collaboration in the production and market development of Sustainable Aviation Fuels (SAF) and critically accelerating the development of nuclear fusion as an energy source.  BAB calls both governments to de-risk industry investment through loan guarantees for capital investments, tax credits, long-term power purchase agreements, and setting clear timelines and processes for licensing.

Transmission Network Deployment

In both the UK and the US, limited grid capacity has been a major impediment for new generator schemes to be connected to the grid. More recently, large scale demand industries such as AI/data centers which require reliable, uninterrupted power at scale are being severely restricted by grid capacity. In the UK the Government has taken a series of actions to address generator connections, the most notable being the National Energy Systems Operator’s (NESO) Connections Reform. Further measures are being taken as the Planning and Infrastructure Act 2025 provisions are implemented, with additional measures in the King Speech for an Energy Independence Bill. In combination, the new legislation is intended to speed up the build-out of vital grid infrastructure with a package of measures to reduce unnecessary delays and to introduce powers needed to take a more strategic approach to planning and building energy infrastructure and operate the electricity system more efficiently. NESO and the regulator Ofgem are implementing pricing and balancing controls to provide stronger locational signals and more efficient mechanisms to improve the flexibility of the energy transmission and distribution. 

Ofgem, NESO, and DESNZ are currently actively consulting on a package of reforms for demand connections that would bring the demand connections process much closer to the reformed generation regime, including prioritisation for strategically important projects.

Across the Atlantic, BAB notes that the US is undertaking efforts to accelerate transmission network deployment. This includes the Federal Energy Regulatory Commission issuing a rule that requires electric transmission providers to adopt forward-looking, scenario-based planning over decades to strengthen grid reliability. In March 2026, the Department of Energy (DOE) announced an approximately $1.9 billion funding opportunity to accelerate urgently needed upgrades to the nation’s power grid and a “Speed to Power” initiative to address grid bottlenecks.

BAB recommends that the US and UK can support each other on this by sharing planning methodologies or collaborating on supporting supply chains for transformers, cables, and skilled workforces that remain bottlenecks. Both governments should also develop grid connection frameworks for large-scale digital infrastructure, including AI/data centers.  By learning and sharing good practice, both governments could leverage investment critical to improving transmission deployment.

Pricing and Market Design

The UK relies heavily on gas-fired generation during periods of system stress, and as these peak-period gas prices are set by international markets and European wholesale hubs, the UK remains exposed to external price shocks. Successive governments have supported price caps and relief schemes for electricity prices to shield consumers and industry from these volatile pricing in global markets. However, the Government is now committed to breaking the link between electricity prices and volatile gas prices. The King’s Speech announced the Electricity Generator Levy Bill which seeks to double down on generators making excessive profits by increasing the windfall tax and offering more proportionate long-term contracts to many renewable operators. Pricing and balancing measures are also seen as improving how clean power generators access the grid, reducing the reliance on gas-fired generation.

The US government has put an emphasis on reducing the regulatory burden on energy producers while increasing domestic production of oil, gas, coal and nuclear energy to reduce energy costs and strengthen energy security.

BAB notes that in both the US and the UK, boosting nuclear energy supply provides a prime opportunity to unlock UK investment in SMR deployment, which is being accelerated through the Atlantic Partnership for Advanced Nuclear Energy.

BAB recommends that the UK’s need to reduce dependence on gas imports, requires more reliable back-up capacity. This creates a strategic opening for US investment in firm generation sources such as nuclear power, as well as long-term LNG supply partnerships that are less tied to European pricing dynamics. Tied to this is the UK’s limited capacity for large-scale and long-duration energy storage. Innovation in battery storage is rapidly developing and provides a strong avenue for renewable energy storage, demonstrated by the US investing in new battery energy storage capacity.

Conclusion

In the face of very different energy policies, the BAB report provides strong opportunities for bilateral investment between the US and UK as both countries reform their energy landscape. It concludes as follows:

“The opportunity lies in providing incentives for capital investments and R&D, streamlining regulations to fast-track energy infrastructure projects, and diversifying energy supply so that both countries can complement each other’s energy needs. US LNG offers a transitional bridge for UK energy security and reducing reliance on volatile global markets, while both governments’ efforts to advance SAF, nuclear and fusion energy provide ample opportunities for collaboration and transatlantic investment”

If further information is required on developments in the energy regulatory system please contact Kevin Gibbs.