Energy Act 2023
What this means for your business
- Applies to
- United Kingdom
- On this page
- 18 compliance obligations, 6 practical guides
What you must do
18 compliance obligations under this legislation — 3 can result in imprisonment.
Appointments 1
Appoint and notify an information and samples coordinator
If your business holds a carbon storage licence or operates an exploration project under such a licence, you must appoint a named person to act as the information and samples coordinator and tell the Office of Gas and Electricity Markets (OGA) who they are and how to contact them. You also have to inform the OGA promptly if the coordinatorās details change.
Management duties 5
Comply with directions and regulations for revenue support contracts
If your company is a carbonādioxide transport and storage, hydrogen transport, hydrogen storage, hydrogen production or carbonācapture counterparty, you must follow any directions from the Secretary of State and all revenueāsupport regulations. You also need to get the required consent for any changes, enforcement actions, termination or legal proceedings relating to your revenueāsupport contract and make sure you can meet all contract liabilities.
Do not disclose OGAāprotected information or samples
If your business receives information or physical samples from the Office of Gas and Electricity Markets (OGA) that are classed as protected, you must keep them confidential and cannot share them with anyone else unless the Secretary of State specifically authorises it or you follow the steps set out in ScheduleāÆ7.
Maintain Authority certification for multiāpurpose interconnectors
If your business holds a licence to run a multiāpurpose interconnector, you must keep a valid certification from the regulator for the whole time you operate it. The certification must be in place from the day the new rule starts and stay current throughout the operating period.
Prepare and agree information & samples plan for carbonāstorage licence events
If your company holds a carbonāstorage licence, you must have a plan in place for how any data and physical samples you hold will be dealt with when a licence event occurs (e.g., change of control, change of operator, transfer or surrender of rights, expiry, termination or revocation). You must agree this plan with the Office of Gas and Electricity Markets (OGA) before most events, or within a reasonable time after termination or revocation, and then follow the agreed plan.
Remove nonācompliant exploration operator from carbon storage licence
If the Oil and Gas Authority (OGA) serves you with an operator removal notice because an exploration operator has breached a requirement on your carbonāstorage licence, you must remove that operator from the licence. From the removal date (at least 28 days after the notice) the operator must not carry out or supervise any of the regulated activities.
Other requirements 3
Comply with enforcement notices issued under the Energy Act
If your business receives an enforcement notice under the Energy Act 2023, you must do exactly what the notice tells you to do ā meet the required standard and follow any specific directions ā within the time limit set in the notice. Failing to do so can lead to criminal sanctions.
Comply with GEMA directions for designated central systems
If the energy regulator (GEMA) issues you a direction about a designated central system you operate, you must follow it. The direction will be to meet the requirements of the relevant designated document or to keep the system running efficiently, and you must do so without breaching any other obligations you have.
Offer contract on standard terms after allocation notification
If your business receives an allocation notification for lowācarbon hydrogen production or carbon capture, you must promptly make a contract offer to the eligible producer or capture entity. The offer must use the standard terms set out in the revenueāsupport regulations (or any agreedāupon modifications).
Offences and prohibitions 7
Be held liable as officer for corporate energy offence
If your company breaches an offence under the Energy Act and you, as a director, manager, secretary or anyone acting in a similar role, gave consent, turned a blind eye, or were negligent, you can be prosecuted personally as well as the company. You may face the same penalties that apply to the corporate offence.
Carry out carbon dioxide storage or transport without a licence
Unlimited fineIf your business operates a site for geological storage of carbon dioxide or provides a service transporting carbon dioxide (e.g., via pipelines) without having the required licence, you commit a criminal offence. On conviction you face an unlimited fine ā either in a magistratesā court (summary) or in a Crown Court (indictment). No prison term is prescribed for this offence.
Destroy or alter information required by regulator
Unlimited fineIf Ofgem or the Nuclear Safeguards Tribunal Authority serves your business with a notice asking for documents or information, you must keep that material intact. Intentionally changing, hiding or destroying any of the requested records is a criminal offence. On conviction you face an unlimited fine, either in the magistrates' court or the Crown Court.
Fail to comply with Energy Act direction
2 years imprisonmentIf Ofgem or the Northern Ireland Secretary for Trade and Investment issues a direction to your business under the Energy Act and you do not follow it without a reasonable excuse, you commit a criminal offence. Conviction can lead to up to two years in prison and an unlimited fine, with lesser penalties for summary convictions in the relevant jurisdiction.
Fail to comply with information or incidentāreporting notice
2 years imprisonmentIf your business receives a notice under the Energy Act that requires you to supply information (s.273) or report an incident (s.274) and you do not do so without a reasonable excuse, you commit a criminal offence. A conviction can lead to an unlimited fine and, if tried in the Crown Court, up to two yearsā imprisonment (or a shorter term and fine if dealt with in a magistratesā court).
Make false or misleading statement to the Secretary of State
2 years imprisonmentIf your business gives the Secretary of State a statement that you know is false or seriously misleading ā for example when responding to a request for information under sections 273, 274(4) or 276, or any other statement connected with the Secretaryās functions ā you commit a criminal offence. On conviction you can be fined (the fine is unlimited on indictment) and/or sent to prison for up to two years. The case can be heard either in a magistratesā court or a Crown Court.
Make false statement in energy regulator application
Unlimited fineIf your business provides information or submits an application to the energy regulator (Ofgem or the NSTA) and the statement is knowingly false or recklessly false in a material way, you commit a criminal offence. On conviction you face an unlimited fine ā the case can be heard in either a magistratesā court (summary) or a Crown Court (indictment). No prison term is prescribed.
Reporting and filing 2
Provide pension information to GEMA if directed
If the Gas and Electricity Markets Authority (GEMA) issues you a formal request for pensionārelated information, you must supply the specified data within the timeāframe and in the manner set out in the direction. Failure to comply can lead to civil enforcement actions such as injunctions or orders to provide the information.
Submit annual activity report to the Secretary of State
Great British Nuclear must prepare a report on the work it has carried out during each 12āmonth period that ends on 31āÆMarch, and send that report to the Secretary of State after the year finishes. The report will then be laid before Parliament. This is a yearly reporting requirement you need to meet.
Penalties for non-compliance
7 penalties under this legislation. 3 can result in imprisonment. 6 carry an unlimited fine.
Fail to comply with Energy Act direction
Unlimited fine and/or 2 years imprisonment
Fail to comply with information or incidentāreporting notice
Unlimited fine and/or 2 years imprisonment
Make false or misleading statement to the Secretary of State
Unlimited fine and/or 2 years imprisonment
Carry out carbon dioxide storage or transport without a licence
Unlimited fine
Destroy or alter information required by regulator
Unlimited fine
Make false statement in energy regulator application
Unlimited fine
Be held liable as officer for corporate energy offence
Penalty applies
Practical guidance
Our guides explain how to comply with the requirements above.
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Sections and provisions
358 classified provisions from this legislation.
Duties 39
- s.13 Modification of conditions of licences the economic regulator
- s.14 Modification of conditions under section 13 : supplementary
- s.19 Consenting to transfer which
- s.22 Determination by CMA of appeal matter
- s.23 CMAās powers on allowing appeal directions
- s.25 Determination of appeal by CMA: supplementary person likely
- s.28 Monitoring, information gathering etc The economic regulator
- s.38 Sections 36 and 37 : supplementary question arises as
- s.39 Forward work programmes year
- s.51 Consultation in relation to transfers
- s.58 Duties of revenue support counterparty revenue support contract
- s.77 Duty to offer to contract following allocation
- s.109 Preparation and agreement of information and samples plans the responsible person
- s.111 Information and samples coordinators A relevant person
- s.113 Prohibition on disclosure of information or samples by OGA Protected material
- s.116 Enforcement notices
- s.119 Operator removal notices the licensee
- s.120 Duty of OGA to give sanction warning notices OGA
- s.123 Withdrawal of sanction notices the OGA
- s.126 Procedure for enforcement decisions
- ... and 19 more duties
Offences and penalties 20
- s.2 Prohibition on unlicensed activities
- s.29 Power to require information for purposes of monitoring
- s.33 Making of false statements etc
- s.34 Liability of officers of entities
- s.93 Section 92 : supplementary
- s.122 Subsequent sanction notices
- s.148 Enforcement, penalties and offences
- s.235 Penalties
- s.242 Sanctions, offences and recovery of costs
- s.252 Sanctions
- s.261 Enforcement, penalties and offences
- s.271 Offence of failure to comply with a direction
- s.272 Corresponding powers to make regulations
- s.275 Contravention of requirement under section 273 or 274
- s.276 Provision of information at specified intervals
- s.280 False statements etc
- s.281 Offences under regulations
- s.282 Proceedings for offences
- s.283 Liability of officers of entities
- s.285 Guidance: criminal and civil sanctions
Powers 142
- Schedule 2 Procedure for appeals under section 20
- s.5 Exemption from prohibition
- s.6 Revocation or withdrawal of exemption
- s.7 Power to grant licences
- s.8 Power to create licence types
- s.9 Procedure for licence applications
- s.10 Competitive tenders for licences
- Schedule 10 Independent System Operator and Planner: pensions
- s.11 Conditions of licences: general
- s.15 Modification by order under other enactments
- s.16 Interim power of Secretary of State to grant licences
- s.18 Transfer of licences
- Schedule 19 Licensing of activities relating to load control
- s.26 Provision of information to or by the economic regulator
- s.27 Power of Secretary of State to require information
- s.37 Functions under the Competition Act 1998
- s.41 Annual report on transport and storage licensing functions
- s.46 Modification of conditions of licences
- s.47 Modification under the Enterprise Act 2002
- s.48 Power to make further modifications of insolvency legislation
- ... and 122 more powers
Definitions 45
- s.1 Principal objectives and general duties of Secretary of State and economic regulator transport and storage network user transport and storage networks relevant site
- s.3 Consultation on proposals for additional activities to become licensable
- s.17 Termination of licence affected person termination event
- Schedule 18 Heat networks regulation the regulations regulated activity code manager licence
- s.31 Reasons for decisions
- s.36 Functions under the Enterprise Act 2002
- s.42 Transport and storage administration orders relevant controlled place
- s.49 Interpretation of Chapter 4 company non-GB company unregistered company
- s.55 Interpretation of Part 1 carbon dioxide stream CMA financial year
- s.56 Chapter 1: interpretation GB gas shipper Northern Ireland gas shipper allocation body
- s.94 Regulations under section 92 (1) : procedure with devolved authorities
- s.99 Designation of strategy and policy statement the CCUS strategy and policy statement policy outcomes strategic priorities
- s.107 Chapter 5: key definitions Carbon storage licence Carbon storage information Carbon storage samples
- s.127 Interpretation of Chapter 5 OGA Tribunal information and samples plan
- s.130 Key definitions for Part 3 designated person gas transporter licence hydrogen
- s.140 Conditions of gas transporter licences for conveyance of hydrogen relevant licence
- s.152 Interpretation of Chapter 1 primary legislation low-carbon heat scheme low-carbon heat target
- s.153 Modifications of the gas code hydrogen grid conversion trial relevant power of entry
- s.158 Revenue certainty scheme for sustainable aviation fuel producers: consultation and report sustainable aviation fuel aviation turbine fuel greenhouse gas
- s.161 The Independent System Operator and Planner (āthe ISOPā)
- ... and 25 more definitions
Exemptions 24
- Schedule 3 Enforcement of obligations of licence holders
- s.12 Standard conditions of licences
- s.24 Time limits for CMA to determine an appeal
- s.30 Duty to carry out impact assessment
- s.35 Criminal proceedings
- s.40 Information in relation to CCUS strategy and policy statement
- s.76 Allocation of contracts
- s.83 Information and advice
- s.86 Transfer schemes
- s.88 Shadow directors, etc
- s.100 Duties with regard to considerations in the statement
- s.115 Power of OGA to give sanction notices
- s.135 Applications for grant etc of gas transporter licence
- s.137 Scope of modification powers under section 136
- s.139 Information and advice
- s.151 Scheme regulations: procedure etc
- s.181 Regulations under Part 5
- s.182 Designation of codes etc
- s.184 Designation of central systems
- s.244 Regulations: procedure and supplemental
- ... and 4 more exemptions