Power purchase agreements and routes to market

This is an overview of the key content to be found in our Power purchase agreements and routes to market subtopic. It briefly explains the nature of this content and provides links to it.

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Practice Note: Drafting take-or-pay clauses in energy contracts—introduces the common features of take-or-pay clauses in energy contracts and provides some example clauses. It also considers the distinction between take-or-pay clauses and take-and-pay clauses
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Practice Note: An introduction to EU law and competition law issues for take-or-pay clauses in energy contracts—introduces take-or-pay clauses in the energy sector and considers some of the EU, regulatory and competition law issues regularly encountered when considering take-or-pay clauses in the energy contracts
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Practice Note: Take-or-pay clauses in energy contracts: the rule on penalties—introduces English Court’s attitude to take-or-pay clauses and a thorough consideration of take-or-pay clauses and the rule on penalties
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Practice

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Latest Energy News

Energy weekly highlights—21 August 2025

This week's edition of Energy weekly highlights includes: a consultation by Ofgem on proposed changes to the electricity distribution licence Special Conditions to enable the TMO4+ grid connections reforms, by creating a new pass-through mechanism in the current price control of Distribution Network Operators (DNOs) which would enable them to pass-through ‘reasonable costs’ associated with the one-off ‘Gate 2 to Whole Queue’ (G2WQ). Relatedly, the evidence submission window for G2WQ closes next week, on Tuesday 26 August 2025 at 23:59. This is the final opportunity for developers participating in G2WQ to submit the required evidence and secure a firm grid connection. In addition this week, Ofgem has approved Uniform Network Code (UNC) Modification 0887, enabling bi-directional flows between the onshore gas National Transmission System (NTS) and Independent Gas Transporters (IGTs). Finally, we cover a High Court ruling on two applications for judicial review in relation to decisions made by the North Sea Transition Authority concerning the accelerated cessation of production and subsequent decommissioning of the Gryphon Floating Production Storage and Offloading (FPSO) facility in the UK Continental Shelf.

Ofgem approves BSC modification P483 to remove half-hourly settlement requirement for flexibility trading

Ofgem has approved Balancing and Settlement Code (BSC) modification P483, which removes the requirement for customers to be half-hourly settled in order for their flexibility to be traded. The change, proposed by Axle Energy and recommended by the BSC panel on 10 July 2025, aims to address barriers that prevent Virtual Lead Parties (VLPs) and Virtual Trading Parties (VTPs) from trading flexibility for domestic and small business customers who are not half-hourly settled. This decision supports a more efficient and economic electricity system and promotes competition. The modification will take effect ten working days after Elexon notifies the industry.

Ofgem consults on modifications to electricity distribution licence to enable TMO4+ connections reform

Ofgem has launched a statutory consultation on proposed amendments to the Special Conditions of the Electricity Distribution Licence to introduce a new pass-through mechanism designed to support Distribution Network Operators (DNOs) in implementing the TMO4+ connections reform. The mechanism would allow DNOs to recover reasonable costs associated with the one-off Gate 2 to Whole Queue (G2tWQ) exercise. It would apply only to the implementation costs of the G2tWQ exercise and not to the costs of processing new applications under CMP435. Ofgem is also consulting on the creation of a connections reform costs governance document to clarify which costs are recoverable and set out associated DNO obligations. The consultation closes on 18 September 2025.

DfT publishes response to RTFO statutory review consultation

The Department for Transport (DfT) has published the response to its November 2024 consultation on the statutory review of the Renewable Transport Fuel Obligation (RTFO). The review confirms that the RTFO continues to meet its objectives of delivering greenhouse gas savings across surface transport. The DfT also plans to launch another consultation on: (1) proposals for the future target trajectory, including options for increased targets; (2) support for development fuels; (3) broadening the RTFO to cover fuels produced from nuclear energy; and (4) expanding the list of eligible non-road transport to include hydrogen fuel cell mobile generators. Additionally, the DfT commits to a separate call for evidence on the eligibility of crops under the Sustainable Aviation Fuel (SAF) Mandate and to establishing an expert working group to consider whether ethanol blending in petrol can be increased beyond E10 (10%) in the UK. Subject to the outcome of the planned consultation and parliamentary time, the DfT intends to introduce any necessary legislation in 2026 and implement changes to the RTFO in time for the start of the 2027 reporting year.