Licensing within the UK’s energy sector does not currently enable data-driven regulation. A change in approach is required to ensure licensees within the sector can be actively and effectively monitored by the UK energy regulator. To our knowledge, this is the first proposed approach which looks at how to conduct energy regulation in a data-driven, digitalized way. This study was conducted to support the UK’s regulator adapt their practices and procedures in regulating many new, digitally capable licensees. By working closely with regulators, civil servants and academics, this paper proposes a novel evolution of the licensing regime for energy sector deployed by the regulator, to enable a digitalized, risk-based approach to licensing to be adopted.