Europe Energy Regulatory Update | February 2025

Our energy regulatory teams across Europe provide updates to clients on a regular basis. This newsletter contains, for each of the countries covered, a selection of recent news items of relevance to the energy transition - including its impact on the non-retail electricity markets. Although it is not intended to be exhaustive, it identifies developments of a policy or regulatory nature considered to be of interest by the contributors.

This month's edition includes updates from the following jurisdictions: Czech Republic, European Union, France, Hungary, Italy, Norway, Poland, Portugal, Sweden, United Kingdom.

Czech Republic

"LEX PLYN" update

The "Lex Plyn" amendment passed its first reading in the Chamber of Deputies and was referred to the relevant committees. On February 6, 2025, the Economic Committee reviewed the proposal and issued a resolution introducing several key modifications.

One of the most significant amendments removes the possibility of granting financial support to coal-fired power plants that only temporarily suspend operations. Critics had warned that this loophole could incentivise operators to shut down plants during periods of lower electricity prices, only to later restart them to qualify for subsidies. The revised version also clarifies that any state support for coal-fired plants will require an exemption from EU rules on state aid, confirming concerns raised by legal experts and environmental organizations.

Additionally, the Committee approved a ban on so-called "electricity destroyers" – devices that consume excess electricity without any useful output, often in response to negative electricity prices. Companies will be prohibited from using such devices for ancillary services or flexibility provisions, with penalties reaching up to CZK5 million for violations.

Despite these adjustments, the amendment remains a topic of debate. Environmental groups and opposition lawmakers continue to raise concerns that the revised bill does not sufficiently guarantee competitive bidding for emergency electricity production and may still allow excessive financial benefits for existing coal operators. Meanwhile, discussions are ongoing about potential further modifications, particularly regarding licensing rules for outdated coal-fired power plants.

The final form of "Lex Plyn" will depend on upcoming parliamentary sessions, with the third reading expected only after a final vote on the Lex OZE III amendment. Both "Lex Plyn" and Lex OZE III are scheduled for further debate in the Chamber of Deputies on March 4, 2025.

European Union

The European Commission’s Competitiveness Compass

At the beginning of 2025, the European Commission published a ‘Competitiveness Compass.’ This document outlines key priorities and policy directions to strengthen the competitiveness of the European economy in the context of rapid technological, geopolitical, and environmental changes. Decarbonisation of industry is a central pillar of this strategy. With ambitious climate goals ahead, the compass underscores the need to align industrial transition with economic resilience. Building on the Draghi report, a "joint roadmap for decarbonisation and competitiveness" is being proposed.

The Clean Industrial Deal (CID): A New Growth Strategy

The Clean Industrial Deal (CID) integrates climate action and competitiveness into a single overarching growth strategy. It represents a commitment to simultaneously accelerating decarbonisation, reindustrialisation, and innovation across the continent while also strengthening Europe's resilience. This initiative aims to provide European industry with a stronger business case for large-scale climate-neutral investments in both energy-intensive industries and clean technologies. Measures are announced across six levels for the entire value chain.

1. Ensuring Access to Affordable Energy

Access to affordable energy forms the first cornerstone of the CID. Three key priorities have been identified as particularly relevant for industry: 1. Reducing energy costs; 2. Accelerating the deployment of clean energy and electrification; 3. Ensuring well-functioning gas markets. The latter may seem counterintuitive at first, but the underlying reasoning is that gas prices have a direct impact on energy prices within the Union. To avoid price volatility and speculation, it is crucial that gas markets function properly.

2. Boosting Demand for and Supply of Clean Technologies

A second focus is on strengthening both the demand for and supply of technologies that contribute to decarbonisation. This can be achieved by ensuring that procurement decisions are not (solely) driven by price criteria but also take into account sustainability and local production (‘European preference criteria’). Additionally, measures will be implemented to promote the use of renewable and low-carbon hydrogen.

3. Mobilising Investments for Decarbonisation

A third major measure involves strengthening public and private investments in decarbonisation projects. To provide short-term support, the CID will mobilise over €100 billion to make business cases more attractive. The Commission will take action to: 1/ Strengthen EU funding: 2/Leverage private investments; 3/Improve the effectiveness of state aid.

4. Strengthening Raw Materials and Circular Economy Strategies

Fourth, Europe is called upon to adopt a more strategic approach to the procurement of raw materials and secondary materials. More than ever, circularity should serve as a driver of innovation.

5. Expanding Global Partnerships

The EU cannot achieve its CID objectives without global partnerships. Therefore, international trade, cooperation, and market mechanisms are treated as a fifth essential pillar. Key measures include establishing sustainable investment partnerships at the international level, reviewing the Carbon Border Adjustment Mechanism (CBAM), and fostering and protecting European industry by creating a level playing field.

6. Promoting High-Quality Jobs and Social Cohesion

The sixth and final pillar of the CID ensures that everyone can benefit from the green transition. High-quality jobs will be prioritised, enabling people to develop new skills while also promoting social cohesion and equality across regions. The industry must be able to attract and retain talent to drive the necessary innovations and sustainability efforts.

The Affordable Energy Action Plan

The Affordable Energy Action Plan was announced alongside the Clean Industrial Deal. It serves as a concrete response to high and volatile energy prices within the EU. The action plan proposes immediate coordinated action to: 1. Lower energy costs for all; 2. Complete the Energy Union; 3. Attract investments: 4.Prepare for potential energy crises. Most of the proposed measures will be implemented in the course of 2025, with a particular focus on actions that provide immediate relief to energy consumers.

1. Tackling High Energy Costs

Reducing energy bills requires tackling the three cost components: network and system costs, taxes, and supply costs. Since natural gas is a crucial part of the electricity mix, ensuring well-functioning gas markets with market-based pricing will also help reduce both gas and electricity bills. Additionally, improving energy efficiency and promoting energy savings will decrease the overall electricity consumption of end users.

2. Completing the Energy Union

Furthermore, the action plan identifies that the Energy Union is still incomplete. The EU must make progress in electrification, achieve full integration of the internal energy market, reach interconnection targets, and leverage complementarities between Member States to establish a fully functional Energy Union that benefits all.

3. Investing in a Sustainable Energy Future

A genuine Energy Union, based on locally produced, sustainable, and affordable energy, requires substantial investments over the next decade. Active engagement from all stakeholders in the energy value chain is therefore essential. A tripartite contract will be established between the public sector (including financial institutions), sustainable energy developers, and energy-intensive industries. Its goal is to enhance transparency and certainty, thereby supporting investment decisions and ultimately reducing both costs and energy prices.

4. Addressing the European Energy Crisis

The action plan concludes with a reference to the European energy crisis triggered by Russia’s military invasion of Ukraine. This highlights the importance of EU-level coordination in managing price surges in the internal market. To enhance resilience in the event of a future energy crisis, Member States must have effective policy instruments in place, and the framework for supply security must be strengthened, taking into account lessons learned from recent developments.

Implementation and Monitoring

The Clean Industrial Deal and the Affordable Energy Action Plan set out concrete measures, but their effectiveness will ultimately depend on implementation. This requires robust measurement tools, monitoring, dialogue, and coordinated action at the EU level to ensure that investments are realized on a larger scale. The Commission has therefore committed to closely tracking progress on key objectives, including decarbonisation and competitiveness, and will gradually introduce new Key Performance Indicators (KPIs) to ensure continuous improvement.

France

Envisaged cut-off of subsidies for rooftop photovoltaic projects

The Minister in charge of Industry and Energy announced in a press release published on 12 February 2025 the launch of a public consultation on a draft order amending the current public support mechanism for the deployment of solar projects on buildings, sheds, and shading structures.

The envisaged amendments are the following:

• For facilities with a capacity of up to 9 kWc, public support will focus on self-consumption facilities.
• For facilities with a capacity between 100 kWc and 500 kWc, public support will be available, as of June 2026, only to projects that rely on a resilient European supply (i.e., those that meet the requirements of the Net-Zero Industry Act).

The rationale for these changes is that rooftop photovoltaic projects have experienced significant growth in recent years, and the sector is now considered mature. Through these changes, the Government aims to contain public spending while favouring French and European industrial supply.

The Minister has also announced that a ministerial order on a public support mechanism tailored for small ground-mounted solar projects will be published shortly. This order is expected to include a bonus for low-carbon panels to encourage low-emission production.

Regulated electricity tariffs decreased by 15% on 1 February 2025

The French energy regulatory commission proposed a significant decrease in regulated electricity sales tariffs (TRVE). While the TRVE were around EUR 281/MWh since 1 February 2024, they are set at EUR 239/MWh as of 1 February 2025, i.e., an average decrease of EUR 42/MWh.

This decrease, which is mainly due to sharply declining market prices, benefits both the 20.4 million households that have subscribed to TRVE contracts and the 4 million households that have subscribed to contracts indexed to TRVE.

For households that have subscribed to TRVE contracts, the average annual electricity bill is expected to decrease from EUR1,240 to EUR1,150.

Hungary

Amendment of renewable energy regulations

Government Decree 7/2025 (I. 31.) on the different application of Act LXVII of 2008 on making district heating services more competitive and Govt. Decree 389/2007 (XII. 23.) on the compulsory takeover and purchase price of electricity produced from renewable energy sources or from waste and cogenerated electricity during the state of emergency (Decree) has amended certain rules regarding the income tax of energy suppliers and the indexation of the mandatory offtake scheme (so-called KáT) prices of electric energy:

• The Decree changed the personal scope of the income tax for energy suppliers. During the state of emergency due to the Russian-Ukrainian conflict, electricity producers participating in the KáT scheme are not subject to the income tax of energy suppliers.
• Pursuant to the Decree, the indexation of the KáT prices is not applicable from 1 January 2025 until the end of the state of emergency, but not later than the end of 2029. The KáT prices remain at the same level as the year before, i.e. 2024. Producers participating in the KáT scheme, who chose to apply the METAR premium (CfD) scheme instead of the mandatory takeover scheme are not affected by the changes.

If the value of the latest annual consumer price index published by the Hungarian Central Statistical Office, compared to the same period of the previous year, is equal to or higher than 1.06, the suspension of indexation shall not apply to that year.

The decree has entered into force on 31 January 2025.

Italy

Transitional FER X?Decree

On 28 February 2025 the Decree of 30 December 2024 (Transitional FER X Decree)?entered into force and it contains a?mechanism that supports the construction of renewable energy plants with generation costs close to market competitiveness?on the basis of?Articles 6 and 7 of Legislative Decree 199/2021?in order to achieve the decarbonisation targets set at 2030.

The?Transitional FER X Decree was published on the MASE website and will be?into force?until 31 December 2025.

Specifically, according to the Transitional FER X Decree photovoltaic plants, wind farms, hydroelectric plants and biogas plants will be eligible to access?the incentives.

The mentioned plants with a power capacity not higher or equal to 1 MW will access directly to the incentive mechanism while other plants with a power capacity higher than 1 MW will have to participate in tenders.

The total power?capacity?that will be made available for each type of plant in the competitive procedures to be held by 31 December 2025 is allocated as follows:

• 10 GW for photovoltaic?plants;
• 4 GW for wind?farms;
• 0.63 GW for hydroelectric?plants;
• 0.02 GW for biogas plants.

MACSE: First auction?on 30 September 2025

Terna has announced that the first MACSE auction to incentivise electrochemical storage systems?will be?on 30 September 2025 and has published the document?of national needs?(documentofabbisogni) of power capacity until 2028 according to which?the national need for storage systems to be supplied by the Macse for 2028 is 10 GWh, according to Terna.

To date, 3.9 GW of new plants have been authorised.?Since the first authorisation?for a?stand-alone system?dates?back to 2017, with a 10 MW Enel project, the MASE subsequently?approved a further 65?storage systems, reaching a capacity of 4,849 MW. Most of the projects authorised up?to 2021 entered in Terna's auction notices for the fast reserve and capacity market, while those?authorised in 2023 and 2024 are destined for the MACSE auction. Terna is ready to connect 45?projects totalling 3.7 GW, particularly in the regions including Sardinia, Abruzzo and Piedmont, which could participate in?the auction.

Norway

Government will not proceed with offshore wind hybrid solutions, will prioritise floating offshore wind with radial

The Ministry of Energy announced on 10 February 2025 that they will not announce the next bottom fixed offshore wind area (Southwest F) for development in 2025. The decision was made based on the conclusions of recently issued report from Statnett regarding grid solutions for offshore projects and the requirement of state support for such projects.

Statnett's study shows that offshore wind production will be dependent on government support, regardless of grid solution. In line with the current policy from the Norwegian government of limiting interconnectors, the Ministry is hesitant to allow projects with both hybrid interconnector and with a need of state support.

Thus, the Ministry will prioritise floating offshore wind projects with radial grid connection. However, the Ministry does not rule out the possibility that a hybrid interconnector grid connection may be applied in the future, should the situation and cost picture change.

Easier and more efficient processing of solar PV power

The Norwegian government announced on 8 February 2025 that Norway is introducing a threshold of 10 MW installed capacity for licensing requirement for solar photovoltaic (PV) power plants. From the 1 July 2025, only PV powerplants with 10 MW or more installed capacity will be subject to an application process under the Norwegian Energy?Act. PV powerplants with installed capacity of less than 10 MW will in the future be subject to the Planning and Building Act and processed by the respective municipality.

At present, the application threshold is governed by the voltage level. This means that PV power plants with similar physical dimensions and similar environmental impacts are not guaranteed equal treatment. A license threshold of 10 MW will result in fewer projects being processed by the energy authorities, including the vast majority of roof-mounted PV power plants/panels, which will allow for a faster processing of smaller PV plants. Also, this frees up capacity so that energy authorities can focus its resources on the licensing of larger and more complicated projects.

Proposal for changes to the Norwegian Energy Act

The Ministry of Energy has submitted a proposal for amendments to the Norwegian Energy Act in Prop. 43 L (2024-2025). The proposal includes, among other things, the introduction of a new legal basis for, at an early stage in the licensing process, discontinuing the processing of energy projects that clearly will not be able to obtain a license. The Ministry also proposes introducing a "collection obligation" for area license holders (generally regional grid operators). The obligation entails that the area license holders will be obliged to build grid infrastructure of up to 22 kV to new production facilities. ?This was previously the producers full responsibility, but the revision still allows the grid operator to demand capital contribution.

Other proposed changes include modernisation of the application and notification rules, extension of the maximum duration of new licenses, statutory provisions for the detailed planning phase and other changes to the licensing regulations.

The changes proposed in Prop. 43 L (2024-2025) was approved by the Norwegian government on 7 February 2025, and have now been sent to the Norwegian Parliament for further consideration and final decision.

Poland

Expanded PPA reporting obligations

On 30 January 2025, the President of the Energy Regulatory Office (ERO) issued a revised interpretation of the Power Purchase Agreement (PPA) reporting obligations under Article 5(11a) of the Energy Law. Previously, reporting obligations only applied to agreements with end-users. However, under the new interpretation, PPAs with non-end-users must also be reported. This change significantly broadens the scope of reporting requirements for renewable energy sources (RES) generators, impacting agreements with intermediaries and energy traders. The revised approach aligns with the ERO's efforts to increase market transparency and regulatory oversight in Poland's energy sector.

To facilitate compliance, the ERO introduced two reporting forms: URE PPA 01 for PPAs with end-users (effective for agreements concluded on or after January 17, 2025) and URE PPA 02 for PPAs with non-end-users (effective from January 30, 2025). RES generators must submit the relevant form within one month of signing a new agreement or amending an existing one, using the Excel and PDF formats outlined on the ERO's website.

Failure to comply may result in financial penalties under Article 56(1)(51a) of the Energy Law. Given these regulatory changes, RES generators are advised to review their contractual obligations and ensure timely reporting to avoid sanctions and maintain compliance.

Portugal

Electric vehicle charging liberalisation

The Portuguese government has announced measures to liberalise and simplify the electric vehicle (EV) charging process, aiming to make it as straightforward as refuelling at traditional petrol stations. These changes include eliminating the need for EV drivers to have contracts with specific energy providers, allowing them to charge their vehicles at any station and pay using standard electronic payment methods.

A significant aspect of this initiative is the removal of the "electric mobility operator" role, which previously acted as an intermediary in the charging process. By eliminating this intermediary, the government anticipates increased competition and reduced charging costs, addressing the relatively high prices currently observed in Portugal.

Additional measures include standardising measurement units to facilitate price comparisons and extending transparency and competition obligations to concessioned spaces, such as motorways. The government also plans to enable charging stations to produce and consume their own energy, allowing for bidirectional charging where excess vehicle capacity can supply power back to the grid.

Portugal approves Offshore Renewable Energy Allocation Plan

The Council of Ministers Resolution no. 19/2025, published on February 7, 2025, approves the Offshore Renewable Energy Allocation Plan (PAER).

The PAER identifies offshore areas along Portugal’s western coast suitable for floating offshore wind farms, with a planned capacity of up to 9.4 GW. This initiative aims to harness stronger and more consistent offshore wind resources, contributing to the targets set in the National Energy and Climate Plan 2030 and Portugal’s goal of achieving climate neutrality by 2045.

The plan underwent a Strategic Environmental Assessment and public consultations to ensure alignment with climate, energy, and maritime spatial planning policies.

Government postpones low-voltage tender to update municipal concession rules

The Low Voltage Coordination Commission (CCBT) has concluded that it is necessary to “update the assumptions and conditions of the municipal concessions currently in force, bringing them into line with the challenges and strategic priorities of the energy sector.”

The commission “identified the need to deepen the conclusions in the light of the changes that have taken place at technical, legislative and regulatory level, both at national level and in the European legal framework.”

The discussion around the renewal of low-voltage concessions began to take centre stage in 2018. Following a public consultation, the Energy Services Regulatory Authority (ERSE) concluded that the new concession model should be divided into three zones (North, Centre and South) rather than a single concession, as is the case now. With this model, around 99.5 per cent of Portugal's territory has its electricity network concessioned to E-Redes, formerly EDP Distribui??o.

Sweden

New government bill on data centres and sustainable fuels

The Swedish Government has presented a new government bill which proposes legislative changes to implement parts of the amended directives on renewable energy and fuel quality, as well as the revised energy efficiency directive:

• A new law on the disclosure of information on data centres’ energy performance is proposed. This means that data centres will be required to report information on, among other things, energy use to a European database. The proposed law aims to increase transparency and improve energy efficiency within the data centre industry, which will help to ensure that data centres use energy in a more sustainable and efficient manner. This requirement will not apply to data centres used for security-sensitive operations or for defence or crisis preparedness purposes, or where services are provided exclusively for security-sensitive operations or for defence or crisis preparedness purposes.
• The bill also proposes new and amended sustainability criteria for renewable fuels, renewable fuels of non-biological origin, and recycled carbon fuels. This means that more fuels will be covered by the sustainability criteria. To be considered sustainable, these fuels must reduce greenhouse gas emissions by at least 70% compared to the use of fossil fuels.?
• Renewable fuels of non-biological origin and recycled carbon fuels must meet specific criteria to ensure they contribute to reduced greenhouse gas emissions and sustainable energy use. Additionally, consequential amendments to the Energy Tax Act and the Electricity Certificate Act are proposed to align with the new sustainability criteria.
• Furthermore, it is proposed that fuel suppliers will be required to reduce greenhouse gas emissions from their fuels by 10%. They can also meet this reduction obligation by providing fossil-free electricity at public charging stations.
• The proposed measures mentioned above are expected to increase demand for renewable fuels, benefiting producers. Consequently, investors in renewable energy projects may see higher returns due to the growing demand for sustainable energy sources.

Most of the legislative changes are proposed to enter into force on July 1, 2025. Some of the changes related to sustainability criteria are proposed to enter into force on January 1, 2026, and January 1, 2030, respectively.

United Kingdom

Contracts for difference

On 6 February 2025, DESNZ announced the publication of the 'Government response to the consultation on additions to the Contract for Difference contract arising from the introduction of a Clean Industry Bonus'. This relates to the Clean Industry Bonus (CIB) consultation launched on 12 November 2024 regarding a CIB to offer extra revenue support under a contract for difference (CfD) to fixed and floating offshore wind applicants who choose to invest in more sustainable supply chains. The announcement page includes a section headed 'Detail of outcome' which sets out the government's decisions (in terms of additions to the CfD contract). The above response was published together with the draft CfD standard terms and conditions (STCs) (dated 5 February 2025) for CfD allocation round 7 (AR7) in 2025 (the STCs contain changes relating to the CIB).

On 13 February 2025, DESNZ published a press release headed 'New industry bonus opens to support good jobs and low carbon manufacturing factories'. This reports that the application window has opened for the CIB.

On 21 February 2025, DESNZ published a consultation document entitled 'Contracts for Difference for Low Carbon Electricity Generation', inviting views on potential changes for CfD AR7 (which is due to open in summer 2025). The changes under consultation include: (i) a relaxation of?CfD?eligibility criteria for fixed?bottom offshore wind projects to permit projects that have not yet obtained full planning consents to participate in near-term allocation; (ii) changes to the information the Secretary of State uses to inform the final budget for fixed?bottom offshore wind, including greater visibility over sealed bid?information; (iii) changes to?CfD?contract terms that would give longer market certainty once contracts are awarded, including consideration of the merits of increasing the current 15-year?CfD?term to reduce overall project costs; and (iv) implementing agreed policy changes and routine changes.

On the same day, DESNZ published a related press release headed 'Essential reforms to pave the way for clean power by 2030'. This states that the aim of the consultation proposals is to provide greater certainty to investors and a better deal for consumers. The proposed reforms aim to secure the additional offshore wind the UK needs to achieve the government's clean power by 2030 target.

The consultation runs?until 21 March 2025, with the government's response expected ahead of AR7.

New nuclear

On 6 February 2025, the Department for Energy Security and Net Zero (DESNZ) and the Prime Minister's Office published a press release headed 'Government rips up rules to fire-up nuclear power'. This reports on proposed reforms to planning rules aimed at "making it easier to build nuclear across the country".

The proposed reforms comprise: (a) the scrapping of the set list of eight sites?for nuclear projects; (b) including mini-nuclear power stations (ie. small and advanced modular reactors) in planning rules for the first time so that firms can start building them in the places that need them – this will provide the flexibility to co-locate nuclear energy generation with energy intensive sites; (c) removing the expiry date on nuclear planning rules so that projects do not get timed-out, and industry can plan for the long term; and (d) setting up a Nuclear Regulatory Taskforce to spearhead improvements to the regulations to help more companies build new nuclear in England and Wales.

Following the press release, DESNZ published, the same day, an open consultation on the draft new National Policy Statement (NPS) for Nuclear Energy Generation, which will be NPS EN-7 (for nuclear power stations expected to deploy beyond 2025).

On 28 February 2025, Great British Nuclear (GBN) (the body the subject of Chapter 4 (Great British Nuclear) in Part 14 (Civil Nuclear Sector) of the Energy Act 2023) issued a press release. This reports that GBN has entered the final stage of the UK’s Small Modular Reactor (SMR) selection process, following the conclusion of negotiations, and is on track to make final decisions in the Spring of this year. An Invitation to Submit Final Tender (ISFT) has been issued to the four remaining vendors, GE-Hitachi Nuclear Energy International LLC, Holtec Britain Ltd, Rolls-Royce SMR Limited, and Westinghouse Electric Company UK Ltd. GBN is the government's delivery body dedicated to supporting the development and deployment of new nuclear technologies in the UK.

Electricity connections reform

On 6 February 2025, National Energy System Operator (NESO) raised a further connections reform code modification proposal in respect of the Connection and Use of System Code (CUSC), namely CMP448 (Introducing a Progression Commitment Fee to the Gate 2 Connections Queue). This is a proposal to establish a framework to introduce an additional financial requirement on developers, that can be activated if required, to incentivise the timely removal of unviable projects from the connections queue and facilitate the more efficient connection of viable projects. The proposal states that CMP448 (which applies only to generation projects ) will support progress towards clean power by 2030 and net zero targets. The workings of the 'Progression Commitment Fee' (PCF), as proposed under CMP448, are explained in the 'Solution Overview' set out in the proposal document (from page 7). Those workings are also summarised in NESO's news item of 10 February 2025 headed 'New tool to drive connections queue progress proposed'.

On 24 February 2025, Ofgem (the energy regulator) announced its decision that CMP448 satisfies Ofgem's urgency criteria and should be treated as an urgent code modification. The decision letter explains that Ofgem's granting of urgency to CMP448 does not pre-determine its coming decisions on whether to approve related CUSC modifications CMP434 or CMP435 and wider Target Model Option 4 + (TMO4+) connections reform proposals, which are subject to consultation (see below).

Grid Code modification proposal - consistency of access

On 28 February 2025, Ofgem announced the publication of a consultation on its minded-to decision to approve the original proposal (Proposal) presented in the GC0117 Grid Code (GC) Final Modification Report (the GC sets out technical requirements for users connecting to the electricity system and its provisions interact with other industry codes that apply to the electricity sector). Ofgem's consultation document is entitled 'GCO117: Improving Transparency and Consistency of Access Arrangements Across GB by the Creation of a pan-GB commonality of Power Station Requirements'. As noted in that document, the energy sector in Great Britain is undergoing significant transformation as it makes the transition to net zero. The current GC does not apply uniform access and connection arrangements across GB, which leads to disparities and inefficiencies that hinder the creation of a pan-GB market for Power Stations and Power Generating Module (PGM) technology. This inconsistency results in different requirements for Power Stations depending on their location, which can lead to higher costs and operational challenges. In response to these challenges, the Proposal was raised on 20 June 2018. The Proposal aims to harmonise the access arrangements for Power Station connections across GB by creating a single, common set of requirements. The modification is intended to improve transparency, efficiency, and competition in the electricity market, ultimately benefiting consumers and the overall energy system.

Offshore wind – OFTO tender round

The offshore transmission owner (OFTO) regime, introduced in 2009, applies for the competitive procurement of offshore electricity transmission assets (which service offshore windfarms). On 21 February 2025, Ofgem gave notice, pursuant to regulation 12(2) of the Electricity (Competitive Tenders for Offshore Transmission Licences) Regulations 2015, of its intention to commence a tender exercise (OFTO tender round 12 (TR12)) in respect of the Sofia offshore windfarm.

On 25 February 2025, Ofgem published a number of documents (including the 'Offshore transmission: tender process guidance document for TR12') in respect of the launch that day of TR12 to identify the bidder to whom an offshore transmission licence will be granted in respect of the transmission assets for the above offshore windfarm. The bid submission deadline is 13 May 2025.

Environmental permits and generation stations

On 10 February 2025, the Environmental Permitting (Electricity Generating Stations) (Amendment) Regulations 2025 (No. 154) (2025 Regulations) were made, coming into force on 28 February 2026 – they were published together with an explanatory memorandum. The 2025 Regulations amend the Environmental Permitting (England and Wales) Regulations 2016 (No. 1154) (Permitting Regulations). The amendments, which apply only in England, introduce additional requirements to the Permitting Regulations in relation to certain regulated facilities which generate electricity (in-scope generators) ("regulated facility” is defined in regulation 8 of the Permitting Regulations).

Paragraphs 8 and 9 of new Schedule 25C of the Permitting Regulations (as introduced by regulations 4 and 5 of the 2025 Regulations) provide that where an application for an environmental permit is made on or after the day on which the 2025 Regulations come into force in respect of an in-scope generator, or for the variation of an environmental permit already granted in respect of an in-scope generator because it is to be substantially refurbished or another combustion plant is to be added to it, the operator must demonstrate that it satisfies certain technical conditions in relation to the feasibility of using carbon capture and storage or conversion to hydrogen firing electricity generation (the baseline requirements) and confirm that it is satisfied that other requirements relating to the feasibility of conversion to and operation of those technologies are met. Please refer to the explanatory memorandum for further detail.

On 28 February 2025, the Environment Agency published a consultation on guidance regarding the above.

Capacity Market

On 11 February 2025, DESNZ published a letter to NESO (as Capacity Market Delivery Body) confirming the final adjusted auction parameters for the one-year ahead (T-1) and the four-year ahead (T-4) Capacity Market auctions.

On 14 February 2025, the Competition and Markets Authority announced that its Subsidy Advice Unit (SAU)?had accepted a request from?DESNZ?for a report concerning the proposed Capacity Market (CM) scheme. The SAU?will prepare a report, which will provide an evaluation of?DESNZ’s assessment of whether the CM scheme complies with the subsidy control requirements under the Subsidy Control Act 2022. The?SAU's report is to be published on 28 March 2025.

On 13 February 2025, the?Electricity Capacity (Amendment) Regulations 2025 (No. 183) were made under powers conferred by the Energy Act 2013, coming into force on 14 February 2025 – they were published with an explanatory memorandum. The regulations amend the Electricity Capacity Regulations 2014 (CM Regulations) to make technical amendments and minor changes to the CM aimed at better enabling existing provisions to be used in practice, reducing administrative burdens, and improving administrative arrangements for the CM to enhance security of supply and, by accelerating investment in low carbon technologies, increase the role that they play in the CM, aligning it better with the government’s net zero objectives.