Licences and licence conditions

Licences and licence conditions

The Gas Act 1986 (as amended) and The Electricity Act 1989 (as amended) and The Energy Act 2023 (the Acts) prohibit certain activities unless the person carrying on that activity is licensed, exempt from the requirement for a licence, or eligible (under the Gas Act only) for an exception to the prohibition on unlicensed activities.

There is a set of standard licence conditions for each licensable activity. Licensees are obliged to comply with the licence conditions for their type of licence from the day the licence is granted.

Licensees must also become party to and/or comply with certain industry codes. You will need to make contact with the appropriate organisations directly in order to sign up to the relevant industry codes. Please visit the codes page of our website for further details and Code Administrator contact details. 

Gas licences and conditions

Electricity licences and conditions

Carbon Dioxide Transport and Storage Licence and conditions

This allows the licensee to:

  • operate a site for the disposal of carbon dioxide by way of geological storage 
  • provide a service of transporting carbon dioxide by a licensable means of transportation

Read the Net Zero North Sea Storage Limited and Liverpool Bay CCS Limited Carbon Dioxide Transport and Storage Licence and conditions on GOV.UK. 

The Smart Meter Communication Licence and conditions

In September 2013, following the completion of a competitive procurement process, the then Department of Energy and Climate Change (DECC) granted the new Smart Meter Communication Licence to Smart DCC Limited, also known as the Data and Communications Company (or DCC).

As the owner of this licence, the DCC is responsible for providing the communications service that links gas and electricity smart meters in homes and small businesses across Great Britain with the systems of energy suppliers, network operators and energy service companies.

Smart Meter Communication Licence Conditions

Independent System Operator and Planner licence

National Electricity System Operator licences and conditions

In September 2024 the Department for Energy and Net Zero (DESNZ) set up the National Energy System Operator (NESO). NESO has been granted an Electricity System Operator licence and Gas System Planner licence that started from 1 October 2024.

It is responsible for operating and planning the electricity transmission system and the strategic planning of the gas system.

Electricity System Operator Licence

Gas System Planner Licence

Exemptions from requiring a licence

There are some instances when you will not need to apply for a licence. Exemptions can apply to individual cases or a class of activity and may be unconditional or subject to certain conditions including length of time.

The Gas Act 1986, the Electricity Act 1989 and the Energy Act 2023 allow the Secretary of State to make orders giving exemptions from the need to hold licences. This means that some activities that fall within the definitions of a licensable activity are, in fact, exempt from the need to hold licences.

We are unable to advise you on exemptions and recommend you consult the Gas Act 1986, the Electricity Act 1989 and the Energy Act 2023, your legal counsel and the Department for Energy Security & Net Zero. You may wish to view examples of gas exemption orders and electricity exemption orders.

Exceptions (Gas only)

Schedule 2A of The Gas Act 1986 (as amended) sets out certain exceptions to the need to hold a licence. It is for the applicant to ascertain whether the proposed activity falls within the scope of an exception.

We cannot advise whether a person carrying on an activity or proposing to carry on an activity will be exempt or excepted from the requirement to hold a licence. 

Additional guidance for suppliers

The gas and electricity supply licences set out the conditions that all energy suppliers must adhere to in order to supply energy to domestic and non-domestic consumers.

We have compiled a range of guides to help suppliers and other stakeholders navigate and understand the obligations of energy suppliers.