Stephen Scott, real estate disputes partner at law firm, Shakespeare Martineau
The UK government’s decision to bring forward the next Contracts for Difference (CfD) allocation round demonstrates a clear commitment to boosting renewable energy projects and an increased sense of urgency as the 2030 clean power target draws closer. However, while attention remains firmly focused on speeding up project approvals and attracting investment, one of the most significant barriers to delivery continues to receive comparatively little attention: access to suitable land.
The challenge is not that the UK is running out of space but rather that renewable energy projects are competing for land with a growing number of other national priorities, including housing, food production and emerging biodiversity programmes. This is compounded by delays in strategic spatial planning, as without a clear national framework identifying where different forms of development should be prioritised, land values will continue to rise. The renewed focus on domestic food security in recent years has only sharpened that tension, forcing policymakers to confront difficult questions about how land should be used and which competing priorities should take precedence.
For renewable energy providers, land availability is only part of the equation as a site may appear attractive but prove commercially unviable due to limited grid connectivity or a lack of capacity at nearby substations. This remains one of the biggest constraints as in many cases, the cost and complexity of securing new grid connections or installing supporting infrastructure can make otherwise suitable land unusable. The suitability requirements also vary significantly by technology, for example solar developments requires large areas of flat land, making regions such as Lincolnshire and East Anglia particularly attractive, whereas hydropower requires elevated land so that water will flow downwards to turn the turbines.
Planning policy adds another layer of complexity. At a national level, successive updates have reinforced support for renewable energy projects yet there remains a disconnect between national ambitions and local decision-making. Authorities and councils frequently face strong community opposition to schemes, and local development plans do not always reflect or initiate the government’s priorities. This inconsistency creates uncertainty for developers and often results in lengthy appeal processes that can contribute to additional costs and delays which undermine viability and could discourage investment altogether.
Tax policy also presents a significant contradiction, exemplified by many renewable energy projects being ideally suited to agricultural land, yet farmers are increasingly reluctant to diversify as doing so could affect their eligibility for Agricultural Relief for Inheritance Tax. Similarly, biodiversity requirements, while important, can also create unintended consequences. The introduction of Biodiversity Net Gain obligations means developers must dedicate 10 per cent of development land to nature enhancement which, while understandable, further reduces the amount of land available for renewable energy infrastructure.
The question therefore remains: how are developers overcoming these constraints? One promising approach is the co-location of technologies, such as combining battery storage with existing renewable energy assets to benefit from their connection to the grid or nearby substation. Agrivoltaics also offer significant potential by installing solar panels on raised structures so certain crops can continue to grow underneath, enabling land to deliver both food production and renewable energy generation simultaneously.
These innovative ideas are providing some relief, but further reform is needed to align national and local planning policy and provide much-needed certainty. A more strategic land-use framework could help identify areas best suited to food production, energy generation and biodiversity net-gain, reducing conflicts and speeding up decision making. Reviewing the Agricultural Property Relief rules could ensure they support, rather than discourage, renewable energy deployment, while greater flexibility within the Biodiversity Net Gain Requirement could allow land to deliver both energy and environmental benefits simultaneously. Planning departments also need additional resources and staff to fast-track decision-making processes and unlock investment at a pace consistent with the government’s ambitions.
The UK’s renewable energy targets are achievable, but government support mechanisms and allocation rounds alone will not deliver them. Unless the growing challenge of land availability and suitability is addressed, the transition to clean energy risks being slowed not by a lack of investor and developer ambition, but by a lack of somewhere to build.
