Following the Commission's Working Paper on unbundling (described above), on 17 September 2014, DECC published a call for comments regarding its proposed amendments to the ownership unbundling provisions of the Electricity Act 1989 and Gas Act 1986. 

The Electricity and Gas (Internal Markets) Regulations 2011 amended the Electricity Act 1989 and Gas Act 1986 in order to transpose the requirements of the Third Package into GB law (there was a separate transposition for Northern Ireland).  However, the Government is concerned that the current transposition of the ownership unbundling requirements of the Third Package might be unduly constraining investment by preventing certification of TSOs even where they do not present a risk of discrimination.  For instance, the current rules can prevent an investor from investing in UK offshore transmission if it owns a wind farm in Greece.

The Government proposes to introduce further flexibility to the GB's unbundling regime, in the form of a new discretionary power enabling Ofgem to certify a TSO where one or more of the five ownership unbundling tests is not passed but where Ofgem does not consider there to be a risk of discrimination in the circumstances.  Responses were invited by 14 October 2014, with the intention of the new regulations coming into force in early 2015.

This is a strong signal of the Government's commitment to encouraging investment in the UK energy markets, whilst retaining the overall aims of the EU Directives’ ownership unbundling requirements.