Power Regulation

Our Energy & Climate Change team comprises individuals with deep sectoral knowledge who have helped shape the regulatory regime for electricity and gas in GB and across the world. We have a team fully devoted to the energy sector that is one of the largest in the UK and a recognised leader in the field.  We are ranked in Band 1 for Energy in Legal 500. 

We have been advising in the electricity and power sector for over 25 years and been at the forefront of creating many of the innovative and ground-breaking elements of the industry structures and markets, as part of this we have drafted laws, industry codes and regulations.  We have unrivalled knowledge of the sector-specific UK primary and secondary legislation.   Our dedicated team has the unique distinction of having written many of the agreements, codes and rules that regulate electricity, gas, water and other utility sectors around the world. Our global experience of developing and implementing market rules and frameworks in many jurisdictions internationally has given us a keen understanding of what has and has not worked in practice, and puts us in an ideal position to anticipate the key issues affecting the industry.

The team regularly advises on interactions and matters with economic regulators and related bodies (such as Ofgem, Ofwat, the Utility Regulator in Northern Ireland, DESNZ and the CMA).   The team is recognised as a “go to” adviser for the sector in navigating industry and regulatory frameworks in the UK and across the world, with advisers who are steeped in an understanding of the legal, political and practical constraints faced by policy makers, regulators and the sectors they regulate.  

CMS has depth of experience in designing markets, with a particular strength in recent years on incorporating renewable energy into the designs. We have worked with clients including governments, single buyers, procurement entities, developers, investors, financiers, operators, off-takers, retailers and the supply chain on hundreds of renewables projects across the globe, which gives us a key insight into what each of these stakeholders requires. We routinely advise on the detail of renewable support regimes, from market design through to the day-to-day interpretation of operational schemes.  

Our recent experience related to power regulation includes:

Market reform

• UK Government on the design and implementation of the new wholesale electricity trading market for Great Britain, and subsequently on electricity market reform, including extensive dealings with the government.
• The Government of Romania on the development and implementation of a Scheme for Procuring EUR10bn+ of Renewable Energy up to 2030.
• The government of Mexico on market reform and designing long term auctions for the procurement of solar and wind projects.
• South African Government on the restructuring of the electricity transmission and distribution industry and the design of the regulatory regime for electricity and for local governments.
• Northern Ireland Electricity plc (Northern Ireland’s electricity asset owner of the electricity transmission and distribution infrastructure) throughout its restructuring, privatisation and flotation during staged market opening up to full retail competition in Northern Ireland, together with the implementation of a single electricity market in Ireland.
• National Grid Company plc on New Electricity Trading Arrangements (NETA) including on the Balancing and Settlement Code, the Implementation Scheme, the British Grid Systems Agreement and Use of Interconnector Agreement, and the extension of NETA to Scotland through BETTA.
• Energy Networks Association on creating a market changing standard contract for procuring flexibility services the networks.
• UK Electricity Market Reform: Advising various members of industry on the British Electricity Market Reform.

New approaches to network regulation and regulatory models

• National Grid Electricity Transmission on Ofgem’s proposed application of the “Competition Proxy Model” to the Hinkley-Seabank transmission line.
• SSE Energy Networks on its response to Ofgem’s consultation on the application of the “SPV” model. 
• NeuConnect and Greenlink on their responses to Ofgem’s consultation on potential variations to the “cap-and-floor” model to support project finance. 

Political and regulatory interventions in the sector

• SSE Energy Services on its responses to Ofgem’s consultations on the default tariff price cap pursuant to the Domestic Gas and Electricity (Tariff Cap) Act 2018.
• Utilita, the prepayment meter specialist supplier, on its (ultimately successful) request to the CMA to review the design of the prepayment meter price cap.  

Price controls and regulated revenue streams

• Cadent Gas Networks on its the RIIO-GD2 price control and subsequent appeal.
• Gas Networks Ireland on interactions with Ofgem (on licensing requirements) and with the Utility Regulator (on licence modifications), as well as on its response to the Utility Regulator’s consultation on the GT17 price control.   
• AES UK and Ireland on its interactions with the Utility Regulator relating to the new ISEM Capacity Market on the island of Ireland , including the Unit Specific Price Cap. 
• Confidential client on the rejection of requests for additional allowances under uncertainty mechanisms.

Regulator interactions

• Confidential clients on Ofgem enforcement action in relation to alleged breaches of generation and supply licences.
• Confidential clients on regulatory investigations and enforcement actions under distribution and transmission licences
• Confidential clients in relation to Ofgem audits in respect of renewable energy subsidies.

To find out more about other related services you can visit the Energy & Climate Change expertise section.