Electricity demand flexibility is expected to play a critical role in integrating renewables, reducing fossil fuel reliance and meeting rising demand in Great Britain's electricity system. The Department for Energy Security and Net Zero (DESNZ) describes consumer-led flexibility (CLF) as giving households and businesses the choice to shift electricity use to off-peak times when power is cheaper and more abundant via energy smart appliances (ESAs) such as electric vehicle smart charge points (EVSCPs), smart electrical heating appliances and smart battery energy storage systems (BESS). It expects CLF to reduce electricity bills and support a more resilient and cost-effective electricity grid. DESNZ seeks to increase CLF to 12 GW by 2030. In order to support CLF, the UK Government plans to introduce new legislation to regulate load control activity.

New regulated activity and licence for 'load control activity'

The Government's proposed legislation will amend the Electricity Act 1989 (the Electricity Act) to prohibit the carrying on of 'load control activity' without a licence or an exemption. The Government consulted on this legislation (and the proposed load control licence conditions) between December 2025 and February 2026.

Under the draft legislation, 'load control activity' means:

  1. performing the functions of a load controller; or
  2. entering into a contract with a consumer to provide for the sending of a load control signal to an ESA at the consumer's premises.

A person performs the function of a load controller if they:

  1. create or change a load control signal; or
  2. control the timing of the sending of a load control signal for the purpose of adjusting the immediate or future flow of electricity into or out of an ESA or another appliance in response to the load control signal.

The definition of load control activity does not capture the activities of the end-user of that ESA.

The Government has distinguished between limbs (a) and (b) of the load control activity definition by referring to those who undertake the activities under limb (a) as 'Load Controllers' and those who undertake the activities under limb (b) as 'Flexibility Service Providers' or 'FSPs '. The distinction largely relates to whether a person has the contract with the consumer. Some licence conditions will apply to all load control activity licensees, whereas others will be specific to Load Controllers or FSPs . However, in practice it is expected that many licensees will be both Load Controllers and FSPs.

The definitions 'load control signal' and 'ESA' are broad. However, DESNZ has stated that Load Controller and FSP activity is only in scope of the licensing regime where the load control relates to the following categories of ESA:

  • EVSCPs (excluding public and rapid charging points);
  • electrical heating appliances (up to 45 kW thermal capacity);
  • consumer BESSs;
  • smart batteries in private electric vehicles; and
  • ancillary appliances used to control the above technologies (whether those technologies are smart or non-smart). The Class A exemption will apply to load control activity undertaken solely in relation to ESAs that fall outside these categories (see below).

Class exemptions

As with other regulated activities under the Electricity Act, the Secretary of State can grant exemptions from the requirement to hold a load control activity licence. DESNZ is currently consulting on its proposed class exemptions, which automatically exempt those whose activities fall within the scope of the exemption.

These are summarised below.

Class A: Exemptions relating to specified activities and appliances

This will apply to load control activities and ESAs that fall outside the core scope of the licensing regime. As noted above, the Government has decided only to license Load Controllers and FSPs in relation to certain ESAs.

Class B: Exemptions relating to industrial and commercial non-domestic consumers

The Class B exemption will apply to FSP activity, where an FSP enters into contracts with consumers to provide them load control, and they contract solely with non‑domestic consumers who are not small business consumers. This reflects the position that the licensing regime is primarily intended to provide protections for domestic and small business consumers.

The definition of small business consumer is a consumer:

  1. with an annual consumption of—
    1. electricity of not more than 200,000 kWh, or
  2. with—
    1. fewer than 50 employees (or their full-time equivalent), and
    2. an annual turnover not exceeding £6.5 million or a balance sheet total not exceeding £5 million.

Class C: Exemptions relating to the purpose of load control

The Class C exemption will apply to load control activities which are for the purpose of configuring devices for the benefit of the consumer and not also for the purpose of providing services that additionally benefit persons operating a transmission or distribution system (including Capacity Market, flexibility markets, or ancillary/balancing services), or persons engaged in the wholesale trading of electricity in Great Britain (participation in the Balancing Mechanism or energy imbalance arrangements under the Balancing and Settlement Code).

Examples include improving the performance or efficiency of appliances or managing energy consumption within a home or building. These activities are not undertaken for the purpose of providing benefits to electricity system operators and do not directly provide services to organisations trading in the wholesale markets. Instead, their purpose is to support consumers in optimising the efficiency of their ESA according to consumers’ preferences. As such, this activity differs in purpose and effect from flexibility that directly supports the electricity system, which remains the core focus of the licensing regime.

In summary, the Class C exemption will only apply if an entity undertakes a licensable activity and neither the FSP nor the Load Controller trades in wholesale markets, nor provides flexibility services to NESO or DNOs, nor has contracts in place with trading parties for the use of the load control in question.

Treatment of small and micro-scale businesses

As part of the consultation, the Government is also considering options for how to treat small Load Controllers and FSPs under the licensing regime, including the possibility of creating additional class exemptions for small Load Controllers and/or FSPs .

Key dates and implementation timeline

The closing date for the DESNZ consultation on the proposed class exemptions was 7 September 2026.

The Government plans to lay load control licence regulations in Parliament in autumn 2026, with the licence requirements expected to come into force in March 2028.

If your organisation undertakes load control activities, our Energy team is here to help you navigate the new regulations. Please contact Gus Wood, James Stanier, George Nixon or Kate Huet.