The Association of Electricity Producers was formed in 1987 as a trade association for electricity producers trading, or wanting to trade under the terms of the Energy Act 1983. The members were small producers involved in Combined Heat and Power and renewable energy schemes. The Association of Independent Electricity Producers, as it was named until 1995, lobbied the government on behalf of its members on issues resulting from the Energy Act. At a time when the electricity industry was almost entirely state-owned, the Energy Act should have given private producers of electricity the chance to compete with the state industry, but, in practice, opportunities were severely limited.

The Electricity Act was passed in 1989, reforming the Energy Act and most of the state electricity industry was privatised in 1990-1991. This marked a period of growth for the Association. Companies intending to compete in, or provide services to, the new market led to a growing membership list.

In recent years the Association has expanded its remit, addressing the climate change agenda growth in renewable generation and health and safety management whilst continuing to work with the electricity and gas markets and operating at a European level.