Who needs a supply licence

You need a Supply Licence to sell electricity to consumers unless you qualify for a Class A exemption (supplying up to 5MW of self-generated power, with maximum 2.5MW to domestic consumers).

Supply Licence holders must meet stringent financial, operational and consumer protection requirements including:

Financial resilience and ring-fencing arrangements
Customer service standards
Vulnerability support obligations
Smart meter rollout requirements

Electricity Supply Licence

Businesses supplying electricity to consumers in Great Britain require a Supply Licence from Ofgem. This applies to energy retailers selling to domestic and business customers.

Who needs a supply licence

You need a Supply Licence to sell electricity to consumers unless you qualify for a Class A exemption (supplying up to 5MW of self-generated power, with maximum 2.5MW to domestic consumers).

Supply Licence holders must meet stringent financial, operational and consumer protection requirements including:

Financial resilience and ring-fencing arrangements
Customer service standards
Vulnerability support obligations
Smart meter rollout requirements

Step 1: Assess whether Class A exemption applies (self-supply up to 5MW)
Step 2: If licence required, prepare detailed business plan and financial projections
Step 3: Demonstrate capability to meet supplier hub and industry code requirements
Step 4: Submit application to Ofgem with supporting documentation
Step 5: Allow 6-12 months for assessment and determination

Class A Supply Exemption

Class A Supply Exemption - Self-supply of electricity (small-scale)

Regulator: Ofgem
Typical fee: None
Frequency: one time
Legal basis: Electricity (Class Exemptions) Order 2001

Allows supply of up to 5MW self-generated electricity (max 2.5MW to domestic consumers) without a licence. Cannot buy and resell electricity. Suitable for on-site renewable generation with private wire arrangements.

Class Exemption (no licence required)

Class Exemption (no licence required) - Electricity generation (<50MW capacity)

Regulator: Ofgem
Typical fee: None
Frequency: one time
Legal basis: Electricity (Class Exemptions from the Requirement for a Licence) Order 2001

Automatic exemption for generators below 50MW meeting specified conditions. No application required. Check Ofgem guidance to confirm eligibility.

UK Bank Ring-Fencing Requirements

Ring-fencing rules requiring separation of retail banking from investment banking for banks with core deposits over £25 billion.

Ring-fencing rules under the Banking Act 2009 require large UK banks to separate core retail banking services into a ring-fenced body (RFB) legally and operationally separate from investment banking activities. This protects retail customers and financial stability.

Ring-Fencing Threshold: UK banks with core deposits over £25 billion
Requirement: Separate ring-fenced body (RFB) for core retail banking
Excluded Activity - Investment Banking: Must be conducted outside RFB
Excluded Activity - Trading Activities: Must be conducted outside RFB
Excluded Activity - Commodities Trading: Must be conducted outside RFB
Protected Services: Retail deposits, overdrafts, credit cards, SME lending
Legislative Source: Banking Act 2009 (amended by Financial Services (Banking Reform) Act 2013)

Purpose: Ring-fencing protects retail customers and small businesses by separating their banking services from riskier investment banking activities. If the investment banking part of the group fails, the ring-fenced retail bank can continue operating independently.

Applies to: Only the largest UK banks with core deposits exceeding £25 billion. Smaller banks and new entrants are not subject to ring-fencing requirements.

Assess Class A exemption

Assess whether Class A exemption applies (self-supply up to 5MW)
Prepare business plan

If licence required, prepare detailed business plan and financial projections
Demonstrate industry code capability

Demonstrate capability to meet supplier hub and industry code requirements
Submit application to Ofgem

Submit application to Ofgem with supporting documentation
Allow assessment time

Allow 6-12 months for assessment and determination

Apply for an electricity supply licence

Legal basis

Business Context Testing

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Guvnor

Electricity Supply Licence

Who needs a supply licence

Assess Class A exemption

Prepare business plan

Demonstrate industry code capability

Submit application to Ofgem

Allow assessment time

Compliance Assistant

🧪 Business Context Testing

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Who needs a supply licence

Assess Class A exemption

Prepare business plan

Demonstrate industry code capability

Submit application to Ofgem

Allow assessment time

Related guides in Energy & Utilities

Business Context Testing

Content Graph