In Zenobe Limited v GEMA [2026] CAT 53 the Competition Appeal Tribunal (the CAT) has dismissed judicial review claims brought under the Subsidy Control Act 2022 (the Act) and on vires grounds to the Gas and Electricity Market Authority’s (GEMA) long duration electricity storage (LDES) cap and floor (C&F) scheme. Following the final oral hearing before the CAT, Zenobe also withdrew a related claim for judicial review raising further wide-ranging public law grounds of challenge, which was listed to be determined at a rolled-up final hearing in July 2026.
Zenobe, an operator of shorter duration battery electricity storage services (BESS), contended that the financial assistance which the C&F arrangements to be awarded by GEMA under the LDES scheme would provide to supported projects would enable those projects to unfairly compete with, and effectively under-cut, BESS assets on various existing competitive electricity markets (with significant adverse consequences for BESS projects’ profit margins, and the roll-out of new BESS projects in the UK).
Zenobe argued that: (i) the use by GEMA of network charges to fund any floor payments required under the LDES scheme would comprise the use of “public resources” within the meaning of s. 2 of the Act, (ii) consequently, LDES C&F arrangements would constitute “subsidies” within the meaning of the Act, such that the LDES scheme was a “subsidy scheme”, (iii) GEMA was accordingly in breach of its obligations under the Act to conduct a subsidy control principles assessment in respect of the scheme, and (iv) further, GEMA lacked the necessary legal powers to undertake the substantial design and development work that it has carried out on the scheme over the course of 2024 and 2025.
The CAT dismissed Zenobe’s claims on all grounds. In summary the CAT held that:
- GEMA had not to date made any “subsidy decision” within the meaning of the Act. Amongst other things, such a decision would only crystallise once GEMA had made its decisions on key outstanding matters such as the level of support to be provided under the scheme, and the content of the C&F licence terms.
- Even if GEMA had made a subsidy scheme, that decision was made under a.10P of the Electricity Act which imposed a statutory duty on Ofgem to establish and operate the LDES scheme. Accordingly, the LDES scheme would benefit from the exemption from the Act provided for in s. 78 and Sch 3 for subsidy schemes established under a duty imposed by primary legislation.
- Given that the decision would be made under a. 10P, and no subsidy decision had been made, Zenobe’s vires grounds must also fail.
The CAT’s judgment provides important analysis on when there is (or is not) a challengeable “subsidy decision” under the Act, the application of the exemption provisions under the Act, the circumstances in which a subsequent decision ‘adopting’ a public authority’s allegedly unlawful earlier decisions/acts will render a claim for judicial review academic and the nature and scope of the CAT’s judicial review jurisdiction relating to non-subsidy control grounds of claim.
Notably, the CAT accepted GEMA’s submission that it should not address the s.2 ‘from public resources’ criterion where doing so was not necessary for its decision. The CAT noted the difficult issues which that issue raises regarding: (i) the interpretation of the ‘public resources’ provisions of Act in domestic law, and (ii) the inconsistent and unclear nature of the EU State aid law “State resources” jurisprudence.
Joseph Barrett KC and Rupert Paines of 11KBW appeared successfully for GEMA throughout the proceedings, together with Barney McCay of Landmark Chambers, instructed by Andrew Jones, Victoria Barkas, Michael knight and Rory O’Donovan of GEMA. A copy of the CAT judgment can be found here:
