When a fire at an electrical substation shut down Heathrow Airport in March 2025, delaying over 1,300 flights and disrupting travel for more than 250,000 people due to a single point of failure in the power supply, it exposed a deeper, systemic reality that has been quietly building for years: the UK’s ageing energy infrastructure and overstretched grid are not fit for purpose.

This is a reality that we can’t afford to ignore. To prevent future disruptions of this scale and bigger, the UK government needs to promote a shift towards decentralised, efficient energy generation at critical sites such as airports, hospitals and data centres. The private sector has deep pockets to fund this transformation – but the government has a key role to play in facilitating and prioritising implementation.

The UK’s grid system, like most countries across the world, also suffers from chronic wastage. Energy loss is rampant throughout the entire system – it disappears during extraction and conversion, at the point of generation (mostly as waste heat), and during transmission and distribution to end users. It was estimated that in 2023 a staggering 55% of the total energy consumed in the UK was wasted. Just as staggering is that, although renewable electricity generation is on the rise, only around a fifth of the UK’s energy system is electric today.

Decentralised energy and energy-efficient solutions are the fastest way to improve energy security, reduce CO₂ emissions in the short term and cut costs for end users.

Energy loss is rampant throughout the entire system – it disappears during extraction and conversion, at the point of generation (mostly as waste heat), and during transmission and distribution to end users.

Addressing energy waste
The UK is wasting a huge amount of energy in the very buildings and industries that keep the country going. Offices, hospitals, factories, schools and transport assets are all haemorrhaging energy through outdated systems that should have been replaced years ago.

The public sector alone uses around 15% of the UK’s energy, yet even basic upgrades are being ignored. The NHS, for instance, could save up to £1bn by 2030 by significantly reducing its energy wastage by installing LED lighting across its sites – a project that could easily be executed by private sector specialists.

Meanwhile, in the average building, two-thirds of primary energy – the fuel used to create the energy needed to power a building – is already lost before it reaches the point of use. One way to combat this is the construction of cost-efficient, on-site energy generation systems such as solar and heat pumps. At the industrial level, these solutions can encompass recycling waste energy and using highly efficient energy systems to deliver electricity directly to the point of use. 

By commissioning and installing decentralised, on-site energy systems and integrating energy recovery projects like these, we can reduce reliance on the grid and provide a more secure and steady energy supply to businesses, public sector organisations and homeowners.

Rapidly growing industries such as AI and data centres, whose energy-intensive nature is well-documented, are also ripe for energy efficiency solutions such as combined cooling, heat and power (CCHP) and other advanced cooling systems, especially at a time when grid connection delays are impacting these assets. Some are even being told to wait until 2037. That’s not a future-ready UK economy; it’s a bottleneck. Ofgem’s recent approval of key reforms to be made by the National Energy System Operator (NESO) to reduce these waiting times is a welcomed first step.

Right now, the UK government is responsible for over £3bn in annual energy losses from its own buildings and infrastructure. That’s twice the amount it plans to save by slashing support for winter fuel payments. It’s hard to square these numbers.

Time for a new playbook
By taking energy efficiency seriously, the UK could reduce energy demand and bills for end users, free up capacity in the supply chain and make the country’s critical infrastructure more resilient towards shocks to the system.

The fire at Heathrow Airport effectively brought the system to a standstill. This was unnecessary, but it also lit a beacon of hope that needs to be acted upon. We need to focus on efficiency first for our energy system and to solve its dirtiest secret – that most of it is wasted.

After all, making the world around us more efficient is one of the greatest economic and commercial opportunities that any developed nation has. And in the energy business, it is the largest, fastest, cheapest and cleanest form of greenhouse gas emission reductions, economic productivity gains and energy security.

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.

• Further reading: ‘What is the primary energy fallacy?’. Dr Jan Rosenow FEI, Senior Research Associate at Oxford and Cambridge Universities, challenges the fallacy that fossils fuels cannot be fully replaced by renewables in the energy transition. He suggests that policymakers should prioritise replacing fossil fuel technologies with efficient, zero-carbon alternatives instead of marginally more efficient fossil fuel technologies.
• The UK has one of the worst insulated housing stocks in Europe, yet the government recently announced it will no longer require homeowners and landlords to meet energy efficiency targets that would have helped reduce residents’ energy bills and emissions. Here, Nic Gillanders, CEO of South Coast Insulation Services (SCIS), offers some solutions.