Committee publication · Estimate memoranda · 29 April 2026
Department for Energy Security and Net Zero Main Estimate Memorandum 2026-27
Summary
DESNZ's Main Estimate for 2026-27 seeks £2.0bn Resource DEL, £8.5bn Capital DEL, £77.5bn Resource AME, and £2.8bn Capital AME to deliver clean energy and net-zero objectives. Major changes include reclassifying Sizewell C from Capital DEL to Capital AME (£2.7bn), adding Renewables Obligation costs (£2.6bn), and increasing CCUS/hydrogen provision (£3.9bn-£8.2bn). Capital DEL falls 27% year-on-year, largely due to Sizewell C reclassification and reduced International Climate Finance.
Key findings
- Resource DEL decreases £48.9m (-2.4%) to £2.021bn; main driver is £43.8m net movement from Prax insolvency funding repayment and £270.6m increase in NDA budget offset by depreciation reclassification.
- Capital DEL drops £3.181bn (-27.1%) to £8.547bn, primarily due to £4.2bn Sizewell C reclassification from DEL to AME, partly offset by £1.309bn additional CCUS Transport & Storage investment and £300m Warm Homes funding.
- Resource AME decreases £3.543bn (-4.4%) to £77.475bn; £29bn lower NDA provision increase (Sellafield review completed in prior year), offset by £2.6bn Renewables Obligation rise and £10bn CFD movement forecast.
- Capital AME increases £2.727bn (+3,391.5%) to £2.808bn entirely due to Sizewell C major capital reclassification (£2.745bn), with £115m Reserve claim anticipated for AGR decommissioning.
- Department targets £157m net RDEL efficiency savings by 2028-29 through workforce/digital reform (AI, shared services) and delivery optimisation; administration costs decrease £26.9m (-6.4%).
Tone
ProceduralTopics
Key actors
Department for Energy Security and Net Zero (DESNZ), Nuclear Decommissioning Authority (NDA), Great British Energy, HM Treasury, Low Carbon Contracts Company, Jonathan Brearley (Head of Department), Martin Gaunt (Interim Chief Financial Officer)
Notable line
“Resource AME is subject to significant fluctuation from year to year due to non-cash costs arising from movements in the fair value of Contracts for Difference and the impact of …”
Key Quotes
“The Department for Energy Security and Net Zero (DESNZ) leads on the G overnment's mission to make the UK a clean energy superpower and aims to achieve …”
“Capital DEL included in 2024-25 a reduction of £2.8 billion for Energy Special Administration Regime (SAR) income.”
“As part of the funding for the Prax insolvency in 2025-26, the Department utilised NDA income which had been profiled in 2026-27 but received during 2025-26 to reduce the size of the claim on the Reserve.”
“… the Department has overprogrammed its portfolio of Capital DEL projects. This reflects historic patterns of underspending and is in line with the portfolio management arrangements agreed as part of SR25.”
“This is largely due to a lower increase in the NDA Nuclear Decommissioning provision forecast for 2026-27 compared to 2025-26, where a substantial increase in the provision was driven by a comprehensive review of the Sellafield plan and a revised estimate of the cost of the Geological Disposal Facility.”
Source · parliament.uk record ↗