Energy Regulatory Update (UK) - August

Our energy regulatory teams across Europe provide updates to clients on a regular basis. This newsletter contains a selection of recent UK news items of relevance to the energy transition and more generally to the energy and natural resources sector. It identifies developments of a policy or regulatory nature considered to be of interest by the contributors.

Competitively Appointed Transmission Owner (CATO) regime

The Competitively Appointed Transmission Owner (CATO) regime introduces a competitive tender process through which a CATO will be appointed and licensed to design, finance, build and operate onshore electricity transmission assets.

On 19 August 2026, Ofgem opened a consultation on the details of the draft CATO licence and associated draft CATO guidance document. The CATO licence is the one that will apply to successful bidders in an onshore electricity transmission early competition tender pursuant to the Electricity (Early-Model Competitive Tenders for Onshore Transmission Licences) Regulations 2025 (No. 446) (the licence gives effect to Ofgem’s previous decision on the CATO commercial model and other related CATO policy decisions). The CATO guidance document that accompanies the CATO licence provides further information on the operation of the licence and the various processes contained within the CATO framework.

The above Ofgem consultation page contains links to the following four documents, the first of which is the main consultation document:

• Draft CATO licence and guidance consultation document;
• Draft CATO licence conditions – for consultation;
• Draft CATO guidance – for consultation; and
• Draft CATO licence definitions – for consultation.

Load Control Activities, licensing and class exemptions

On 7 August 2026, the Department for Energy Security and Net Zero (DESNZ) announced that it is proposing to make the Electricity (Class Exemptions from the Requirement for a Licence) (Amendment) Order 2027 (Order) under the Electricity Act 1989. The announcement includes the notice titled “Smart Secure Electricity Systems (SSES) Programme: Notice of Proposed Class Exemptions from the Requirement to Hold a Load Control Licence”(Notice). The Secretary of State is required under sections 5(2) and 5(3) of the 1989 Act to give a notice before making an order granting exemptions from the requirement to hold a licence.

The requirement to hold a load control licence will be introduced through the forthcoming Electricity Act 1989 (Load Control Licence) Regulations 2026 (Regulations); and the proposed Order will amend the Electricity (Class Exemptions from the Requirement for a Licence) Order 2001 to create three class exemptions from the requirement to hold a load control licence. The Notice invites representations on the proposed scope and terms of the exemptions, as described in the Notice.

The proposed Order forms part of the Smart Secure Electricity Systems (SSES) Programme, under which the government is introducing a licensing framework for load control activities to ensure appropriate protections for consumers and the electricity system are in place as markets in energy smart appliances and consumer-led flexibility services continue to grow. Class exemptions within this framework are intended to be a proportionate approach to regulation at the current stage of market development, focusing licensing requirements on load control activities that present the greatest potential risks, as well as opportunities, to consumers and the electricity system. This means activities and energy smart appliances (ESAs) that have the highest potential to provide flexibility benefits to consumers and to the electricity system will not be exempt from the requirement to hold a licence.

An ESA is an appliance that can adjust the immediate or future flow of electricity, either in or out of itself or another device following a load control signal (see Part 9 (Energy smart appliances and load control) of the Energy Act 2023).

Clean energy and National Planning

On 17 August 2026, the Ministry of Housing, Communities and Local Government published the new National Planning Policy Framework (Framework), which sets out the government’s policies for plan-making and for making decisions on development proposals in England and how these are expected to be applied. This August 2026 version replaces the previous National Planning Policy Framework published in December 2024.

Chapter 1 (Introduction) of the Framework explains its role and practical points on its structure and use, and gives an overview of the purpose of the planning system. The policies to be used for plan-making and decision-making are then set out in the chapters that follow. Chapter 10 is on securing clean energy and water – the objective of the policies in that chapter is to support the development and operation of energy and water infrastructure in ways which align with wider development, clean power and net zero objectives (including the delivery of clean power by 2030). The decision-making policies in the Framework take effect from 17 August 2026.

On the same day, the Ministry of Housing, Communities and Local Government:

• published the government’s response to the consultation launched on 16 December 2025 titled “Proposed reforms to the National Planning Policy Framework and other changes to the planning system”; and
• published a policy statement titled “Creating a clear, rules-based planning system” – this discusses the new Framework and the background to it.

Electricity network infrastructure

On 6 August 2026, DESNZ announced a consultation on “Permitted Development Rights to support ground investigations and surveys for electricity network infrastructure”, seeking views on introducing a permitted development right (PDR) for ground investigations and surveys for electricity networks in England. The PDR would allow some low-impact, temporary ground investigations and surveys for electricity network projects to proceed without the need for a planning application, subject to a set of conditions and limitations. The proposed PDR aims to reduce delays and administrative burden for electricity network developers and local planning authorities, whilst maintaining environmental safeguards. By enabling more efficient delivery of ground investigations to inform project design and environmental impact assessments, the proposal should de-risk electricity network delivery, supporting lower system and consumer costs, energy security, and economic growth.

Contracts for Difference – Supplier Obligation

On 13 August 2026, DESNZ announced an open consultation titled “Consultation on proposed legislative changes to support implementation of the British Industrial Competitiveness Scheme” – this seeks views on proposed legislative amendments to the Contracts for Difference (CfD) supplier obligation to enable implementation of the British Industrial Competitiveness Scheme (BICS) (the BICS is a scheme to reduce the electricity costs of eligible manufacturers). The proposals (if implemented) would allow Exchequer funding to be channelled through the CfD supplier obligation to prevent implementation of BICS from increasing electricity bills for households and other non-exempt consumers. The consultation was published together with the draft Contracts for Difference (Electricity Supplier Obligations) (Amendment) Regulations 2026.

Strategic Spatial Energy Plan – update

On 14 August 2026, National Energy System Operator (NESO) announced in its newsletter the publication of its “SSEP Transparency Update” (SSEP Update) which gives the latest changes to the Strategic Spatial Energy Plan (SSEP) methodology. The SSEP is the energy plan being prepared by NESO, which will be the first overall plan for Great Britain’s energy production and storage from 2030 to 2050 – it will provide a pathway for electricity and hydrogen generation and storage types, locations, capacities, and timings. The final SSEP is due to be published in autumn 2027. The table on pages 6 and 7 of the SSEP Update provides information on government policy for particular technologies, as considered by NESO in its pathway assessment process, including in respect of solar, offshore wind, hydrogen and nuclear.