Gas and Electricity Construction Market Report UK 2025-2029

Market Summary

The UK gas and electricity construction market is experiencing substantial growth, fuelled by a commitment to decarbonisation and energy security. In the first half of 2025, electricity accounted for 42% of infrastructure output, amounting to £7.4bn.

The electricity sector is expected to remain a key driver of infrastructure construction over the coming years, driven by the government’s decarbonisation agenda and the need to strengthen and expand the electricity grid to meet increasing demand and accommodate new renewables capacity. We anticipate sustained double-digit annual growth in this sector over the next few years.

Report Overview

Growth in Renewables Generation: In 2024, renewables produced over half of the UK’s electricity demand for the first time, accounting for 50.8% of generation.

Infrastructure Pipeline: The UK government launched a new Infrastructure Pipeline in July 2025, worth around £530 billion over the next 10 years, with energy projects accounting for 37% of planned investment.

Decarbonisation Goals: The government aims to achieve at least 95% of Great Britain’s electricity generation from low-carbon sources by 2030, with significant targets for offshore wind (43-50 GW) and solar PV (45-47 GW).

The Great Grid Upgrade: launched by National Grid in 2023, is set to be the most significant overhaul of the UK electricity network in generations. This initiative includes 17 major infrastructure projects across England and Wales, aimed at extending the high-voltage power grid. The upgrade will involve the construction of new overhead lines, pylons, substations, and subsea cables.

Onshore and Offshore Wind: The report outlines a significant increase in both onshore and offshore wind capacity, with growth supported by favourable government policies and reforms to the planning system, the grid connections process and the CfD scheme.

Solar PV Expansion: The UK solar market is anticipated to experience substantial growth, with the government aiming to triple solar capacity by 2030. However, in the short term, challenges such as long wait times for planning approvals and grid connection bottlenecks may hinder the expansion of solar PV capacity.

Gas-Fired Power Role: While the overall share of gas in electricity generation is declining as renewables expand, gas-fired plants are expected to remain crucial for balancing the grid and ensuring energy security during the energy transition.

Nuclear Power: The UK government aims to grow nuclear energy capacity to 24 GW by 2050, up from 6GW in 2025, with a mix of traditional large-scale power plants and small modular reactors (SMRs).

Technological Advances: The report emphasises the role of technologies, including energy storage solutions, smart grid technologies and carbon capture and storage (CCS), in supporting the transition to a low-carbon energy system.

Market Size 

The electricity sector accounted for over a third (37%) of total infrastructure construction output in 2024, representing £12.5bn. In contrast, the gas construction market is substantially smaller, with the ONS estimating its output at £58m in 2024.

Market Analysis

In 2024, energy industries contributed 2.4% to the economy, with investments reaching £23.6bn, primarily in electricity. The market is shifting towards renewable sources, with ambitious targets for offshore and onshore wind, solar, as well as nuclear energy. However, challenges such as rising project costs, regulatory hurdles, and infrastructure bottlenecks persist. Government reforms, including more streamlined planning processes and reforms to funding mechanisms, aim to accelerate project delivery and enhance energy security.

Forecast

The electricity sector is expected to remain a key driver of infrastructure construction over the coming years, supported by the government’s decarbonisation agenda and the need to strengthen and expand the electricity grid to meet increasing demand. We forecast annual growth rates of 16% to 20% (at 2025 prices) for 2026-29.

Key Companies Mentioned in the Report

Major operators in the UK electricity generation sector include:

• EDF
• RWE
• SSE
• Drax
• Uniper
• Orsted
• Centrica
• Vitol
• Scottish Power
• EPH

Market Trends and Influences

Market influences include political commitments to net-zero emissions, economic incentives like Contracts for Difference (CfDs), and technological advancements in energy storage, CCS and smart grid solutions.

Electricity demand is expected to double by 2050, driven by the electrification of transport and heat. Substantial, ongoing investment in energy infrastructure is crucial to manage this transformation and meet net-zero targets.

The Labour government’s commitment to investing in clean energy infrastructure is giving investors much-needed certainty. However, recent political developments have introduced uncertainty regarding this commitment if the Conservative Party or Reform UK were to form the next government.

Sector Analysis

This report focuses on gas and electricity construction. It also analyses the energy system, covering the following key technologies: wind (onshore and offshore), solar PV, nuclear power, gas-fired power, hydro power, bioenergy, battery storage, as well as the transmission and distribution networks.