Get an electricity generation licence

Do you need a generation licence?

The Electricity Act 1989 prohibits unlicensed generation. However, the Class Exemptions Order provides automatic exemptions for smaller generators.

Key exemption points

You are exempt from licensing if:

• Your declared net capacity is under 50MW
• You generate under 10MW under the alternative small generator exemption
• You consume all electricity on-site (no export)

You need a licence if:

• Your capacity is 50MW or above
• You don't meet Class Exemption conditions
• You export to the grid above exemption thresholds

Applying for a licence in Great Britain

In England, Scotland, and Wales, Ofgem is the licensing authority for electricity generation.

What happens after you get a licence

Licence holders must comply with Standard Licence Conditions on an ongoing basis. These include:

• Grid Code compliance
• Distribution Code compliance (if connecting to distribution network)
• Connection and Use of System Code (CUSC) compliance
• Financial reporting to Ofgem
• Information provision on request

Breaching licence conditions can result in enforcement action with penalties up to 10% of turnover.

Applying for a licence in Northern Ireland

Northern Ireland has a separate regulatory system. The Utility Regulator (NIAUR) is the licensing authority, not Ofgem.

Northern Ireland differences

Key differences from Great Britain:

• Different application process and forms
• Participates in Single Electricity Market (SEM) with Republic of Ireland
• Northern Ireland Renewables Obligation (NIRO) rather than GB RO schemes
• Smaller market with different commercial dynamics

Environmental permits for combustion plant

If you operate combustion plant (boilers, engines, turbines, CHP), you need environmental permits in addition to any generation licence.

Large combustion plant (50MW+)

Larger installations require more rigorous permitting as Part A(1) installations.

Decarbonisation readiness (from February 2026)

New electricity generating stations will need to demonstrate readiness for decarbonisation when applying for environmental permits. This includes feasibility assessments for:

• Carbon capture and storage (CCS)
• Conversion to hydrogen firing

Plan for this requirement if you're developing new generation capacity.

Grid connection requirements

All generators connecting to the electricity network need a connection agreement. The current connections queue is severely backlogged with over 700GW of projects waiting.

Navigating the connections queue

From January 2025, the 'First Ready, First Connected' (TM04+) process applies to new transmission connection applications. Key points:

• Gate 1: Submit application during open window for indicative connection date
• Gate 2: Provide evidence of planning progress and land rights for firm offer
• Milestones: Must meet designated milestones or risk offer termination

For smaller projects connecting via distribution networks, apply directly to your local DNO. Timelines are generally shorter but still depend on reinforcement requirements.

COMAH compliance for energy facilities

If your energy facility stores hazardous substances (including hydrogen for hydrogen-ready plant), you may need to comply with Control of Major Accident Hazards (COMAH) regulations.

COMAH tier requirements

COMAH has two tiers of regulation:

• Lower Tier (5+ tonnes hydrogen): Notification, MAPP document, emergency planning
• Upper Tier (50+ tonnes hydrogen): Full safety report, on-site emergency plan, land-use planning controls

Even below COMAH thresholds, DSEAR (Dangerous Substances and Explosive Atmospheres Regulations) applies to all facilities handling flammable substances.

Steps to set up electricity generation