UK Law and Practice Contributed by: Tom Sprange KC, Andrea Stauber, Martina Antosova and Lucy Pearson, King & Spalding International LLP
1. Structure and Ownership of the Power Industry 1.1 Law Governing the Structure and Ownership of the Power Industry The UK has a fully liberalised and privatised electricity market, meaning that the companies responsible for the generation, transmission, distribution and sale of the UK’s electricity are all in the private sector. However, this is set to change. On 25 July 2024, the government intro- duced the Great British Energy Bill into Parlia- ment – the aim of which was to establish a new, public-owned company (Great British Energy) that would work closely with the private sector to promote, invest, own and manage clean ener- gy projects. On 15 May 2025, the Great British Energy Act received royal assent after passing through Parliament and came into force on the same day. The government has announced that Great British Energy is backed by GBP8.3 billion between now and July 2029. Structure and System of Ownership Currently, England, Wales and Scotland (Great Britain, Britain, or GB) have a single integrated energy market for both electricity and natural gas. On 1 October 2024, the National Energy System Operator (NESO) replaced the National Grid Electricity System Operator (National Grid ESO) as the electricity system operator for Great Britain. Unlike National Grid ESO, which was part of National Grid plc, NESO is an independ- ent public corporation overseeing Great Britain’s electricity and gas networks. NESO’s focus is on ensuring that Great Britain’s energy system is secure, affordable and amenable to a sustain- able future. The power industry in Northern Ireland is sepa- rate to and distinct from the industry in Great Britain. This is because energy in Northern Ire-
land (other than nuclear energy) is a devolved power, meaning the Northern Ireland Assembly – rather than the UK Parliament – has legislative control. The electricity industry operates a single wholesale market across the whole of the island of Ireland, known as the Single Electricity Mar- ket (SEM). The operation of this single wholesale market requires the physical connection of the Northern Ireland grid to that in the Republic of Ireland. This is facilitated by the Single Electricity Market Operator (SEMO), which is a contractual joint venture between the two system operators – System Operator for Northern Ireland (SONI) in Northern Ireland and EirGrid plc in the Republic of Ireland. Principal Laws Governing Ownership The Electricity Act 1989 requires that the follow- ing are authorised by a licence: • generators; • those who participate in the transmission of electricity; • distribution network operators; • supply companies; • those who co-ordinate the flow of electricity onto and over transmission systems; • interconnector operators; and • smart meter providers. The last EU energy legislation package to be fully implemented by Great Britain before its exit from the EU (“Brexit”) was the Third Energy Package. This was adopted by: • the Gas and Electricity (Internal Markets) Regulations 2011 in Great Britain; and • the Gas and Electricity (Internal Markets) Regulations (Northern Ireland) 2011 and 2013 in Northern Ireland.
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