Last amended by Energy Act 2013 in 2013. Introduced Electricity Market Reform including Contracts for Difference (CfD) and Capacity Market mechanisms to support low-carbon generation.
Independent editorial summary — not the official statute text. Read the official version on legislation.gov.uk.
Summary
The Electricity Act 1989 privatised the electricity supply industry and established the regulatory framework that continues today. It created the licensing regime for generation, transmission, distribution, and supply, established the regulator (now Ofgem), and imposed duties regarding security of supply and environmental obligations.
Key Points
- Creates licensing system for electricity generation, transmission, distribution, supply (Part I)
- Establishes principal objective of protecting consumer interests (s.3A)
- Places duty on regulator to have regard to security of supply and environment (s.3A)
- Creates electricity codes including Grid Code and CUSC (s.33-34)
- Gives National Grid role as system operator (balancing supply and demand)
- Provides for competition in supply and meter point administration
Parts & Sections
Amendments History
2013 — Energy Act 2013
Introduced Electricity Market Reform including Contracts for Difference (CfD) and Capacity Market mechanisms to support low-carbon generation.
Frequently asked questions
- What did the Electricity Act 1989 do for the electricity industry?
- The Electricity Act 1989 privatised the electricity supply industry and established the regulatory framework that continues today. It created the licensing regime for generation, transmission, distribution, and supply, and established the regulator, which is now Ofgem. The Act also imposed duties regarding security of supply and environmental obligations.
- Can I supply electricity without a licence?
- No, a person may not generate, transmit, distribute, or supply electricity unless they are authorised by a licence or an exemption. The Act establishes a licensing system for these activities to ensure compliance with regulatory standards.
- What is the main goal of the electricity regulator under this Act?
- The principal objective of the Act is to protect the interests of existing and future consumers. The regulator has duties to have regard to security of supply, sustainability, and the efficient use of resources when performing its functions.
- What role does National Grid play under the Electricity Act 1989?
- The Act gives National Grid the role of system operator. In this capacity, it is responsible for balancing supply and demand within the electricity network to ensure stability and reliability.
- Does the Act create specific codes for electricity trading?
- The Act creates electricity codes, including the Grid Code and CUSC. It also provides for competition in supply and meter point administration, which helps structure how electricity is traded and managed within the market.