Preliminary Strategic Direction Statement for industry codes

Following consultation, we have published our preliminary Strategic Direction Statement (SDS) to help coordinate and prioritise strategic change within industry codes. Contained within is a strategic assessment of government policies and developments in the energy sector that we consider will or may require code modifications. 

As we move toward Net Zero, it is vital that industry codes can evolve to support this transition, and we view code changes as a key driver of change to enable the implementation of government and Ofgem’s policy priorities. 

We have published the strategic document ahead of the first code manager appointments in 2026, and before our obligation to do so. This early publication is intended to support prospective code managers in preparing for their roles and support all stakeholders in progressing the strategic changes essential to achieving the government’s goal of clean power by 2030. 

The SDS will be an annual document. We plan to publish the next formal SDS in 2026, after our legal obligation to do so under the Act comes into effect. 

Background

The Energy Act 2023 gives new powers and responsibilities to Ofgem. This enables us to implement significant reform to the governance of the energy industry codes.

The transitional powers provided by the Act gives Ofgem new functions to set the direction for the development of designated electricity and gas industry codes, as well as the ability to modify licences and codes.

In January 2025, we sought feedback on the draft preliminary Strategic Direction Statement (SDS) and proposed changes to code governance arrangements. 

Please see our decision to that consultation for:

• the consultation details
• the consultation responses 
• our decision

On the basis of the consultation responses, an updated strategic review of the sector and careful consideration of our policy teams, we decided to make several changes to the draft preliminary SDS.