Electricity Licence Exemptions

The Electricity Act 1989 ("the Act"), as amended by the Utilities Act 2000, provides for granting exemptions from the requirement to have a generation, transmission, distribution or supply licence.

The Electricity (Class Exemptions from the Requirement for a Licence) Order 2001 came into force on 1 October 2001. Under the regime, the operator determines whether he meets the requirements in the Order and thereby qualifies for an exemption. The Act also allows the Secretary of State individually to exempt, through secondary legislation, new generation plant that does not qualify for class exemption.

The Government produced a Regulatory Impact Assessment in respect of the Class Exemptions Order in October 2001.

In March 2007, an order was introduced amending Schedule 3 to the Electricity (Class Exemptions from the Requirement for a Licence) Order 2001 to add a new class exemption from the requirement of section 4(1)(bb) of the Electricity Act 1989 (which prohibits the distribution of electricity without a licence). The new class exemption applies to those who are engaged in the activity of offshore distribution.

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