Energy Act 2004
What this means for your business
- Enforced by
- Ofgem, The Crown Estate, Crown Estate Scotland
- Applies to
- United Kingdom
- On this page
- 14 compliance obligations, 1 practical guide
What you must do
14 compliance obligations under this legislation — 5 can result in imprisonment.
Management duties 4
Apply for permission and follow the procedure for appealing a GEMA decision
If your business wants to challenge a decision made by the Gas and Electricity Markets Authority (GEMA) under section 173, you must apply to the Competition and Markets Authority (CMA) for permission to appeal. The application has to be lodged within 15 working days of the decision, sent to the CMA and GEMA, copied to anyone affected, and include any information the appeal rules require, signed with a statement of truth. The CMA will decide on your request within 10 working days and may attach conditions you must obey.
Carry out approved decommissioning programmes and meet conditions
2 years imprisonmentIf your business submits a decommissioning plan that the Minister approves, you must see that the work is completed exactly as set out and that every condition attached to the approval is fulfilled. You may not carry out any decommissioning activity unless it follows the approved programme or you have the Minister’s explicit agreement.
Prepare and submit nuclear de‑commissioning/clean‑up plans and follow NDA directions
If your business controls a nuclear installation, a principal nuclear site or a related facility, you must draw up the NDA‑required plans for de‑commissioning, operation or clean‑up, send them to the NDA for approval and then carry out any further directions they give – including providing information and consulting with the parties they specify. In short, you need to manage the planning and execution of all nuclear clean‑up and de‑commissioning work under the NDA’s oversight.
Use nuclear sites only for NDA purposes and account for any benefits
If your business controls a designated nuclear installation, site or facility, you must only use, lease, sell or licence it for activities that help the Nuclear Decommissioning Authority (NDA) carry out its duties, and you must not breach any other legal obligations. Any money or benefits you receive from such use or disposal must be passed to the NDA unless the NDA has given written consent for a different arrangement.
Other requirements 2
Comply with CMA directions in appeal determinations
Unlimited fineIf your business is involved in an appeal to the Competition and Markets Authority (CMA) under the Energy Act, you must follow any direction the CMA gives you. The direction is enforceable like a court order, so you need to act on it and make sure you have the legal power to do so. Failure to comply can lead to prosecution.
Provide security for decommissioning programme when required
If the Minister decides you must carry out a decommissioning programme and issues a notice requiring security, you must put in place the specified financial security (e.g., bond or guarantee). The security must be provided on the timetable set by the Minister and is treated as a condition of the programme’s approval.
Payments and fees 3
Make annual payment under high‑cost electricity distribution scheme
If the Secretary of State creates a scheme for an area where electricity distribution costs are unusually high, your business – if you are an authorised electricity transmitter – must pay a set amount each year. The payment is funded by adjusting the charges you levy on electricity suppliers and must be passed on to distributors so that the benefit reaches the suppliers in that area.
Pay costs and provide security for a Minister‑prepared de‑commissioning programme
If you fail to act on a notice under s105 or the Minister rejects the de‑commissioning plan you submitted, the Minister can draw up his own programme. You must then comply with that programme and the Minister can require you to provide security and pay any costs he incurs, plus interest.
Pay specified sum if you miss renewable fuel obligations
If your business does not fully meet its renewable transport fuel (RTF) obligation for a reporting period, the order can require you to pay a cash sum to the Administrator. The amount may increase over time, be adjusted for inflation, and must be paid within the period set by the order. In practice you need to either satisfy the RTF requirement or make the required payment on time.
Offences and prohibitions 5
Enter or operate in a safety zone without permission
2 years imprisonmentIf a vessel enters or stays in a safety zone without the permission required by section 96, or breaches any condition of that permission, the vessel’s owner and its master can be prosecuted. Likewise, anyone carrying out an activity in a safety zone without permission, or breaching the permission’s conditions, commits an offence. Conviction can lead to an unlimited fine and/or up to two years’ imprisonment.
Fail to comply with a Ministerial information notice
2 years imprisonmentIf the appropriate Minister serves you with a notice requiring you to supply specified information or documents about a de‑commissioning project (or related object) and you do not provide it within the time limit and without a reasonable excuse, you commit a criminal offence. The same applies if you wrongly disclose that information, unless one of the listed exemptions applies. Conviction can lead to a fine and/or imprisonment, though the Act does not state the exact maximum penalties here.
Fail to notify Minister when becoming responsible for a relevant offshore object
2 years imprisonmentIf your company proposes, starts, or takes part in building, extending, operating or de‑commissioning an offshore structure in waters covered by the Energy Act 2004, you must inform the appropriate Minister. Not doing so (or failing to keep the Minister updated) breaches Section 112 and is a criminal offence. Conviction can lead to a fine or imprisonment, with the exact limits set elsewhere in the legislation.
Fail to send revised administration proposals as required
Unlimited fineIf you are the energy administrator and you do not send the revised proposals to the registrar of companies, the Secretary of State, GEMA, every known creditor and every known member within the prescribed time, you commit a criminal offence. Conviction can lead to a fine (potentially unlimited) and/or imprisonment.
Wrongful disclosure of revenue/customs information
2 years imprisonmentIf your business discloses revenue or customs information about an individual in breach of the confidentiality rules in section 131B(2) and the person's identity is revealed or can be worked out, you commit a criminal offence. On conviction you face up to two years’ imprisonment, an unlimited fine, or both. The case can be heard in either a magistrates’ court or the Crown Court.
Penalties for non-compliance
7 penalties under this legislation. 5 can result in imprisonment. 7 carry an unlimited fine.
Fail to comply with decommissioning remedial notice
Unlimited fine and/or 2 years imprisonment
Enter or operate in a safety zone without permission
Unlimited fine and/or 2 years imprisonment
Fail to comply with a Ministerial information notice
Unlimited fine and/or 2 years imprisonment
Fail to notify Minister when becoming responsible for a relevant offshore object
Unlimited fine and/or 2 years imprisonment
Wrongful disclosure of revenue/customs information
Unlimited fine and/or 2 years imprisonment
Comply with CMA directions in appeal determinations
Unlimited fine
Fail to send revised administration proposals as required
Unlimited fine
Practical guidance
Our guides explain how to comply with the requirements above.
Sections and provisions
238 classified provisions from this legislation.
Duties 35
- s.6 Designations relating to Scotland
- s.7 Supplemental functions NDA
- s.8 Special functions in relation to pensions etc.
- s.9 General duties when carrying out functions
- s.11 Strategy for carrying out functions
- s.12 Contents of strategy purpose include references
- s.15 Duty to decommission and clean up installations and sites NDA
- s.17 Duty to use installations etc. for purposes of NDA
- s.18 Directions by NDA to the person with control obligation
- s.21 Financial responsibilities of NDA NDA for the purpose …
- Schedule 22 Procedure for appeals under section 173 party
- s.26 Accounts of NDA
- s.31 Establishment and maintenance of the Account Secretary of State
- s.32 Examination of the Account statement is
- s.42 Transfer of Nuclear Liabilities Investment Portfolio direction given
- s.53 Chief constable and other senior officers assistant chief constable are
- s.54 Functions of senior officers person
- s.55A Provision of additional police services person or persons
- s.55B Provision of assistance to other forces The chief constable
- s.59A Constables serving with National Crime Agency
- ... and 15 more duties
Offences and penalties 10
- Schedule 20 Conduct of energy administration
- s.97 Offences relating to safety zones
- s.110 Default in carrying out decommissioning programmes
- s.111 Regulations about decommissioning
- s.112 Duty to inform appropriate Minister
- s.112A Power of appropriate Minister to require information and documents
- s.113 Offences relating to decommissioning programmes
- s.130 Objections to civil penalties
- s.131 Appeals against civil penalties
- s.131C Wrongful disclosure
Powers 66
- Schedule 1 The Nuclear Decommissioning Authority
- Schedule 3 Procedural requirements applicable to NDA’s annual plans
- s.3 Designated responsibilities
- s.4 Additional responsibilities under designating directions
- Schedule 8 Pensions
- s.10 Powers for carrying out functions
- Schedule 12 Planning and reports about Constabulary
- s.14 Annual reports
- s.16 Duties to operate installations and to provide treatment etc.
- Schedule 16 Applications and proposals for notices under section 95
- s.20 Duty to comply with directions under s. 18
- Schedule 21 Energy transfer schemes
- s.22 Expenditure and receipts of NDA
- s.23 Borrowing by the NDA
- s.24 Limit on NDA borrowing
- s.25 Government guarantees for NDA borrowing
- s.35 Power to modify Chapter 1 of Part 1
- s.38 Nuclear transfer schemes
- s.39 Transfers of publicly owned assets
- s.40 Transfers with the consent of the transferor
- ... and 46 more powers
Definitions 30
- s.1 The Nuclear Decommissioning Authority
- Schedule 6 Structure etc. of transferee companies the Authorities company accounting reference period
- s.19 Designation as a related site for the purposes of s. 18
- s.27 Tax exemption for NDA activities NDA company management contract
- s.36 Meaning of “nuclear site” etc. and “person with control” nuclear site contaminated site principal nuclear site
- s.37 General interpretation of Chapter 1 of Part 1 hazardous material NDA facility nuclear installation
- s.44 Extinguishment of BNFL losses for tax purposes BNFL company BNFL parent company qualifying period
- s.50 Interpretation of Chapter 2 of Part 1 nuclear company company
- s.59 Members of Constabulary serving with other forces chief officer relevant force
- s.67 Trade union membership trade union
- s.71 Interpretation of Chapter 3 of Part 1 chief constable the Constabulary licensed nuclear site
- s.80 Additional functions of UKAEA nuclear pension scheme public service pension scheme
- s.89 Activities offshore requiring 1989 Act licences relevant place system
- s.96 Prohibited activities in safety zones
- s.104 Interpretation of Chapter 2 of Part 2 safety zone Scottish waters Welsh waters
- s.114 Interpretation of Chapter 3 of Part 2 appropriate Minister decommissioning programme relevant object
- s.129 Imposition of civil penalties
- s.132 Interpretation of Chapter 5 of Part 2 Administrator biofuel blended biofuel
- s.142 Interpretation of Chapter 1 of Part 3 transmission licence
- s.147 Consequential amendments of the 1989 Act electricity interconnector
- ... and 10 more definitions
Exemptions 18
- Schedule 2 Procedural requirements applicable to NDA’s strategy
- Schedule 9 Taxation provisions relating to nuclear transfer schemes
- s.33 Validity of transactions
- s.41 Recovery of property from private ownership
- s.48 Supplementary powers of the Secretary of State, the NDA and the UKAEA
- s.56A Exercise of powers and privileges in Scotland
- s.72 Transfer of authorisations
- s.86 Prosecutions
- s.95 Safety zones around renewable energy installations
- s.98 Supplementary provisions relating to offences under s. 97
- s.105A Section 105 notices: supplemental
- s.105 Requirement to prepare decommissioning programmes
- s.131B Further disclosure of information
- s.140 Duties to provide information etc. to Secretary of State
- s.162 Restrictions on making of ordinary administration orders
- s.163 Restrictions on administrator appointments by creditors etc.
- s.192 Powers exercisable by statutory instrument
- Schedule 18 Property arrangements schemes