P442 supply. We have the demand.
Businesses want as much licence exempt supply under P442 as they can contract, and there is not yet enough generation set up to provide it. We source it for buyers, and we bring buyers to generators who can supply.
The levy saving finally reaches the deal.
Electricity Market Reform levies, which fund Contracts for Difference and the Capacity Market, are charged to licensed suppliers on the volume they supply. Where one meter recorded both licensed and exempt supply, central systems could not tell them apart, so the levy was charged on power the licensed supplier never sold. That cost usually landed on the exempt arrangement.
P442 fixed it. Ofgem approved the modification on 8 May 2024 and Elexon implemented it on 27 February 2025. An Exempt Supply Notification Agent (ESNA) now calculates the two volumes separately, and exempt volumes can be kept out of the levy calculation. For on-site, private wire and community supply, that changes the economics materially.
You want as much P442 supply as you can get.
Exempt supply from generation on or next to your site usually beats grid supply on unit cost, because the power avoids the network and much of the policy cost. Under P442, levy leakage no longer eats the saving.
- Generation identified on, beside or near your sites
- Exempt supply structured alongside your licensed top-up
- ESNA appointment and metering checked before signature
- Economics calculated on the P442 basis, not the old one
There are buyers waiting for your power.
If your asset sits on or beside a consumer, or can supply a landlord’s tenants or a defined group of local customers, exempt supply can pay more than export. It works as a second revenue stream alongside a standard PPA for the rest of your output.
- Rooftop and ground-mount solar on or beside large sites
- Wind, hydro and AD with a consumer next door
- Landlord and multi-tenant generation
- Community schemes supplying local customers
Four parties, one meter, two volumes.
Generator
Supplies the consumer directly under a licence exemption, at an agreed price.
Consumer
Takes the exempt supply first and buys the rest from its licensed supplier.
Licensed supplier
Provides top-up when generation falls short, which it will, on the same metering system.
ESNA
Splits licensed and exempt volumes and reports them to central systems, so the levies fall only on the licensed share.
What we check.
The exemption
Exemptions are self-assessed against statutory thresholds. Nobody confirms you qualify, and nobody stops you if you have got it wrong.
Metering and settlement
Which metering system records what, who the data collector is, and whether the volumes can be reported cleanly.
The ESNA
Appointed, qualified and actually submitting, not a line in a plan.
Top-up terms
What the licensed supplier charges for the hours generation does not cover, and how it treats the exempt volume.
The economics
Recalculated on the P442 basis. Arrangements priced before it often assumed levy leakage that no longer has to happen.
Room to grow
Exemptions have limits. If the arrangement will grow through them, that is a licensing conversation, better had early.
Already running exempt supply? Elexon’s interim process closed to existing users on 31 October 2026. If your arrangement relied on it and there is no qualified ESNA in place, talk to us now. Read the background on P442 and the ESNA.
Tell us which side you are on.
Buyers: where your sites are and roughly what they use. Generators: what you have, where it is and what sits next to it. We reply within one working day, and the first conversation costs nothing.
Prefer to talk? +44 1704 796058
P442 supply, answered.
What is P442?
P442 is a modification to the Balancing and Settlement Code. It lets a metering system that records both licensed and licence exempt supply have the two volumes calculated and reported separately, so exempt volumes can be kept out of the Electricity Market Reform levies charged to licensed suppliers. Ofgem approved it on 8 May 2024 and Elexon implemented it on 27 February 2025.
What is P442 supply?
Electricity supplied to a consumer under a licence exemption, on a site where a licensed supplier also provides top-up, with the exempt volume reported separately under P442. The consumer gets locally generated power without the levy leakage that used to erode the saving.
What is an ESNA?
The Exempt Supply Notification Agent, a party agent role created by P442. The ESNA calculates the licensed and exempt volumes on a metering system and submits them to central settlement systems. It has to pass a qualification process before it can operate.
Which levies does P442 affect?
The Electricity Market Reform levies, which fund the Contracts for Difference scheme and the Capacity Market and are charged to licensed suppliers on the volume they supply. P442 means exempt volume no longer has to be counted as the licensed supplier’s demand for those charges.
Can any business buy P442 supply?
Only where generation and consumption can be connected under an exemption: on-site generation, a generator on adjacent land supplying over a private wire, a landlord supplying tenants, or a community scheme supplying local customers. If the generation is elsewhere on the network, the answer is usually a sleeved PPA instead, and we will tell you which applies.
Is P442 supply the same as a PPA?
No. A PPA is a contract for power, usually delivered through a licensed supplier. P442 supply is power sold directly under a licence exemption, with P442 handling how it is reported. A generator can run exempt supply alongside a standard PPA for the rest of its output.