UK Law and Practice Contributed by: Tom Sprange KC, Andrea Stauber, Martina Antosova and Lucy Pearson, King & Spalding International LLP
jects”. Regulatory requirements (particularly in relation to permitting and siting) represent significant barriers to accelerated deployment. The Taskforce recom- mended establishing a single, unified decision-making body, to remedy the fragmentation in regulatory over- sight and streamline environmental and permitting processes. The government has accepted the Task- force’s recommendations and is expected to produce an implementation plan in 2026. 3.2 Obtaining Approvals to Construct and Operate Generation Facilities All electricity generators (commercial or otherwise) must obtain a generation licence – issued by Ofgem – under Section 6 (1)(a) of the Electricity Act 1989 (as amended by Section 186 of the Energy Act 2023). It is an offence to generate, distribute or supply energy without a licence unless the Secretary of State for Energy Security and Net Zero grants a class or indi- vidual exemption. The Electricity (Applications for Licences, Modifica- tions of an Area and Extensions and Restrictions of Licences) Regulations 2019 (SI 2019/1023) as amend- ed (the “Electricity Licence Application Regulations”), made by Ofgem, set out the procedure for applying for a licence and the fee payable. Although primary responsibility for the energy sec- tor falls on GEMA, GEMA delegates the day-to-day administration of its functions to Ofgem. Accordingly, Ofgem has the authority both to grant licences (with- out further reference to GEMA or any government ministry) and enforce them. Ofgem adopts a risk-based approach to licence applications, in that all applicants must complete the information required under Tier 1 so that an initial risk assessment may be carried out. The application may then progress to Tier 2, which gives rise to additional requirements. When considering whether to grant a licence, Ofgem will consider whether: • the licensees can finance their activities; • all reasonable demands for electricity and gas are met;
• the licence will contribute to the achievement of sustainable development; and • the interests of particular consumer groups (eg, those with a disability) are met. 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 Energy 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 complete), the relevant time period for processing the application commences. For electricity generation 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 comply 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 gen- eration licence is the least regulated of the licensable activities. From 1 October 2025, an electricity generation licence has the following standard conditions. • The licensee must comply with:
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