Energy & Utilities

Run an electricity network business

Electricity transmission and distribution are licensed monopoly activities in Great Britain. Transmission operators need an Ofgem transmission licence and must comply with the Grid Code and CUSC under the RIIO-T price control. Distribution network operators need a distribution licence, sit under the RIIO-ED price control and must meet Ofgem's guaranteed standards of performance. Businesses that build and adopt new connection assets follow the ICP accreditation or IDNO licence route. In Northern Ireland the networks are regulated by UREGNI.

UK-wide
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UK-wide

Related guides in General Compliance

Grid Connection Agreement

All electricity generators connecting to the GB electricity network require a connection agreement with either NESO (National Energy …

Owning or operating the wires is a licensed activity in Great Britain. Whether you operate high-voltage transmission, a regional distribution network, or build and adopt new connection assets for housing and commercial developments, your licence and price-control obligations come from Ofgem under the Electricity Act 1989. Operating a licensable network without a licence is a criminal offence under section 4 of that Act. Northern Ireland is separate: NIE Networks is regulated by the Utility Regulator (UREGNI) — see applying for an electricity or gas licence in Northern Ireland.

Transmission: licence, codes and price control

Operating a high-voltage transmission system needs an Ofgem transmission licence. In practice these are held by the established transmission owners, but any new entrant operating transmission assets needs its own licence.

Holding the licence brings the industry codes with it: the Grid Code sets the technical standards for connecting to and using the transmission system, and the Connection and Use of System Code (CUSC) sets the commercial terms.

Distribution: licence, price control and standards

Operating a distribution network — the medium- and low-voltage networks that deliver electricity to end users — needs an Ofgem distribution licence, whether you are an established Distribution Network Operator (DNO) or an Independent Distribution Network Operator (IDNO) adopting private networks.

Distribution licence holders must also meet Ofgem's quality of service standards, including automatic compensation when supply interruptions exceed set durations.

Building and adopting new connections: ICP or IDNO

If your business designs, installs and adopts electrical connection assets — new housing estates or commercial sites — you operate in the contestable connections market rather than a licensed territory. Choose your route: ICP accreditation through the National Electricity Registration Scheme, or an Ofgem distribution licence to operate as an IDNO and own adopted networks.

Next steps

Put the duties every energy business shares in place with run a compliant energy business, and confirm your position with the energy compliance checklist. If you also generate or supply, see get an electricity generation licence and comply as an energy supplier.