Licence modifications, derogations, revocations and transfers

We work with licensed companies in the active management of their licence and its requirements.

There are four main ways in which a company’s licence and its associated conditions can change: licence modification, licence revocation, licence derogation, and licence transfer.

Licence modifications

We may decide to modify the licence (and associated conditions) relevant to one or more named companies for reasons specific to those companies.

Alternatively, we may decide to modify the standard licence conditions that apply to all holders of a licence (subject to any company-specific derogations as explained below). 

Licence revocations

There are circumstances in which we might revoke the licence of a company. The conditions by which a licence may be revoked are included in the terms of the licences that we grant.

Requests to have a licence revoked

A licensee that is no longer using and therefore does not want to retain its licence may apply to the Gas and Electricity Markets Authority (the Authority) to have its licence revoked.

Such requests must be made in writing (by post or email) on company letterhead and signed by a duly authorised person, and marked for the attention of our Industry Codes and Licensing Team.

Written requests for a licence to be revoked should include the following:

1. full details of the licence to be revoked including licence holder and licence type
2. full details of continuity of supply arrangements (supply licences only – see below)
3. confirmation that the licensee is aware that the revocation is irreversible
4. a statement confirming that all relevant renewable/social scheme obligations have been discharged, or details of the licensee's plans to discharge any outstanding obligations (supply licences only).

Providing the Authority agrees that the licence should be revoked, we will issue to the licensee a Notice of Revocation. This notice gives the licensee 30 days notice that the licence will be revoked.

Licence revocations are irreversible and should you still need a licence you would have to re-apply for a new one.

Securing continuity of supply

A gas or electricity supply licensee applying to revoke a licence must provide details of arrangements for securing continuity of supply for all relevant customers. Where there are no customers, the licensee should provide written confirmation to that effect.

Licence derogations

A derogation is an exemption from a particular requirement of the standard licence conditions for a particular licensed company or companies. It is usually granted for a limited period.

Licence transfers

If you wish to transfer a licence to another legal entity, you will need to complete the same application form and meet the same criteria as you would for a new licence application in the name of the transferee.

A transfer may relate to the whole or any part of the licence and may be requested by the existing licensee.

Authority consent for a transfer

When deciding whether to give consent to a requested transfer, we are obliged to apply the same criteria as for a new licence application.

This means in the case of a whole-licence transfer, we will apply the criteria as if we were to consider granting a corresponding licence to the transferee. In the case of a partial transfer we will apply the same criteria as if we were to consider granting:

• the transferee a licence corresponding to so much of the licence as is proposed to be transferred
• the transferor a licence corresponding to so much of the licence as is being retained.

Those seeking a transfer must, therefore, provide all the information required by the application regulations and satisfy the same criteria.

Differences between the process for new licences and licence transfers

The three main differences between the transfer of a licence and a new licence application are:

1. no application fee is payable for licence transfer applications
2. there is no requirement on the applicants to publish a notice of application for a licence transfer
3. we are required to publish a notice (for at least two months) proposing to give our consent to a transfer.

Most transfers are the result of mergers and acquisitions, or company restructuring. A licence must be transferred if, because of the merger, acquisition or restructuring, the legal entity that is proposed to be carrying on the licensable activity is not the same legal entity to which the licence was granted.

Licences are granted to a legal entity and cannot be bought or sold separate to that legal entity. Therefore, if the licensee wishes to move their licence to a different company, consent for transfer or a new licence is required.

When transferring a licence, if the new licensee intends to commence the licensable activity shortly after our consent is granted we will ask them to demonstrate that arrangements to accede to relevant codes by the proposed transfer date are in place.