UK Law and Practice Contributed by: Tom Sprange KC, Andrea Stauber, Martina Antosova and Lucy Pearson, King & Spalding International LLP
Ofgem must act in accordance with its duties as set out in Section 3A of the Electricity Act 1989, as well as with the Utilities Act 2000, the Competition Act 1998, the Enterprise Act 2002, the Energy Act 2004, the Energy Act 2008, the Energy Act 2010, the Energy Act 2011, the Ener- gy Act 2013 and the Energy Act 2023. Public participation/input is not permitted or required; rather, Ofgem undertakes the process internally. Once Ofgem has deemed that an application has been “duly made” (ie, confirmed as com- plete), the relevant time period for processing the application commences. For electricity gen- eration licences, it is 65 working days. Applicants for a gas or electricity licence must publish notice of their application within ten working days of notification that the relevant application has been duly made. Once a licence is granted, licensees must com- ply with the standard licence conditions and also become party to and/or comply with certain industry codes. 3.3 Approvals to Construct and Operate Generation Facilities The standard licence conditions (SLCs) will depend on the type of licence that is granted. In general terms, the licence requires the provision of ancillary services to National Grid, prevents the licensee from making excessive profits from transmission constraints, and – in some cases – prohibits discrimination in selling electricity. The licence is a public document and is available on Ofgem’s electronic public register. A generation licence is the least regulated of the licensable activities.
From 1 October 2024, an electricity generation licence has the following standard conditions. • The licensee must comply with: (a) the requirements of the Grid Code (so far as applicable); (b) every applicable Distribution Code; (c) the Fuel Security Code; (d) the programme implementation scheme designated by the Secretary of State; (e) the Balancing and Settlement Code (BSC) and New Electricity Trading Arrangements (NETA) Implementation; (f) the Connection and Use of System Code (CUSC); (g) the BETTA run-off arrangements scheme; (h) any scheme imposed by the Secretary of State in relation to the preparation and storage of regulatory accounts; and (i) any scheme made by the Secretary of State under Schedule 7 to the Utilities Act 2000. • The licensee must make all reasonable meas- ures to secure and implement the provisions of the Utilities Act 2000. • The licensee must be party to: (a) the BSC Framework Agreement; and (b) the CUSC Framework Agreement. • From time to time, upon request by the SO, the licensee must offer terms for the provision by the licensee of ancillary services from any operating generation set of the licensee. • The licensee must, at any time and upon request of GEMA, provide a report containing the details of: (a) prices offered for the provision of ancillary services; and (b) an explanation of the factors justifying the prices offered. • The licensee must furnish GEMA with infor- mation it reasonably requires for the purpose
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