Consultation on the draft second preliminary Strategic Direction Statement for industry codes

Details of outcome

For most policy areas included in the second preliminary SDS (SDS-2), we have decided that the time horizon categorisations and the codes we expect to be affected are appropriate. 

On the basis of consultation responses and recent policy developments, we have decided to make several changes to the SDS-2. We have partly updated most sections since the draft version. We have also added new policy areas.  

We have also decided to proceed with our proposed approach to convert the SDS-2 from a preliminary to a hybrid SDS. This will follow from the expected designation of the Retail Energy Code and the Balancing and Settlement Code.

Please visit the Energy codes: Strategic Direction Statement page to see the Second Preliminary Strategic Direction Statement for industry codes and the spreadsheet for Second Preliminary Strategic Direction Statement.

Read the full outcome

Original consultation

The transitional powers provided by the Energy Act 2023 gives Ofgem new functions to set the direction for the development of designated electricity and gas industry codes. As part of the transition to a new code governance framework, Ofgem published the first preliminary Strategic Direction Statement in August 2025.  

We are now consulting on the proposed content of the second preliminary SDS, including our categorisation of policy areas and whether any key areas which may or will require code changes are missing from our assessment. We are also seeking views on our proposed approach for converting the second preliminary SDS from a preliminary to hybrid document, once the expected designation of the Balancing and Settlement Code and the Retail Energy Code occurs by the end of 2026.   

Who should respond 

We want to hear views and feedback from anyone who has an interest in, or works on, the energy codes. This includes:   

• code administrators  
• code parties  
• central system delivery bodies  
• consumer groups