Tristan Ward and Mustafa Latif-Aramesh
The Government has changed course. A sentence which often instils elation or dread depending on the policy in question. In this instance, (with unlucky timing on the eve of the COVID-19 outbreak), the Government has launched a consultation on changing its approach to renewable energy.
The Government asks whether its Contracts for Difference scheme should be expanded to include onshore wind and solar photovoltaic. To date, the scheme has resulted in the award of contracts for 16GW of new renewable electricity capacity, including nearly 13GW of offshore wind capacity – but the Government considers an expansion to the scope of the scheme is now required.
While this article concentrates the Government’s proposal for how developers and local communities should engage with one another when onshore renewable energy projects are proposed, the government’s proposals also include the extension of the scheme until March 2030, measures aimed at strengthening delivery incentives and supply chains, the removal of new coal-to-biomass conversions from future auctions, and including energy storage.
Why are these suggestions being brought forward now? In two words: Net Zero. UK policy is moving toward an “ultra-low carbon power sector” in order achieve the “net zero” carbon target by 2050. This ambition is in line with the Committee of Climate Change’s recommendation that there should be at least a fourfold increase in the UK’s renewable energy capacity.
The devil in the detail: local community engagement
Both developers and landowners need to be aware of the Government’s proposals – in the Government’s words – “tough new guidance for renewable energy developers to ensure local communities given more effective voice and make sure they have a definitive say on developments that affect them”. The apparent intention to make it harder to obtain planning consent for renewable energy renewable projects does not sit easily with the Secretary of State for Business statement in the same announcement that “Ending [Britain’s] contribution to climate change means making the UK a world leader in renewable energy”.
Objectors to wind energy projects have turned to the planning system to try to prevent consent being granted. In R (The Friends of Hethel Limited v South Norfolk DC) for example, objectors argued that the turbines would damage the setting of a listed building; and in R (Wright) v Resilient Energy Severndale Ltd the objector successfully argued that a promised yearly donation to the community of around £20,000 for the 25 year lifetime of the turbine had been improperly taken into consideration by the planning authority in deciding to grant consent.
In this vein, it is not clear how the proposals out for consultation interact with existing planning policies such as existing local plans, the National Planning Policy Framework, and the National Policy Statements for schemes under the Planning Act 2008.
Developers should take legal advice to ensure inconsistent requirements are reconciled, and to take advantage of overlapping requirements to avoid duplication of their efforts (and additional cost!).
Broadly, the Government makes three proposals to increase local community benefit and engagement.
Local community investors?
First, and the starkest part of the Government’s suggestions is that developers provide “an opportunity for communities or local people to invest in the project, with this opportunity additional to a community benefit fund”.
How precisely this marries with initial investors in a development taking significant risks before a site is ready for local community investment is not clear. If the proposal becomes law, developers will wish to consider how this risk is rewarded.
Community benefit funds are also mentioned. Such funds have become fairly common in large infrastructure projects, but transfer of the concept to the renewable energy sector should enable efficiencies in providing these community benefit funds. For example, a centralised or combined fund paid for jointly with other developers in order to reduce administrative costs could be beneficial.
Of course, there is no one size fits all community fund, but developers should take opportunities to collaborative. This is could be the intention behind the Government’s proposal to create “a register of renewable energy developments in England that lists available projects and community benefits”.
The Government’s consultation also reminds developers to consider how to engage with the local community on their community benefit funds. The timing of consultation and engagement could be challenging: developers should provide information enabling the local community to respond in a fully informed way, but over-development of proposals costs money that is wasted if is necessary to change course.
The Government’s second proposal is that “community benefits… last the lifetime of the project”. That requires thinking beyond the initial construction stages, and considering how operational benefits of projects could be utilised.
Government has also made clear that if a project or site is sold, successor operators must comply with agreements with the local community. This, of course, is a matter for agreement between developers, but parties will need to ensure agreements and consents can be transferred and are acceptable in the market.
Landscape and visual impact?
Thirdly, Government wants developers to assess “the potential effect of a proposed renewable energy development on visual amenity and landscape”. This is of course a fundamental requirement of the Environmental Impact Assessment Directive (where applicable), and an aspect which is mentioned in virtually every planning policy document.
We think this proposal wholly or partly stems from opposition to onshore developments discussed above, bearing in mind the Contracts for Difference scheme had initially excluded onshore wind and solar energy from support.
Local Community teeth
This proposal is directed at requiring developers to meet (or placate) the needs (or concerns) of local communities. Government promises that Local Communities “will have a definitive say on whether projects are allowed to proceed.” How is this to be achieved?
A clue comes in the Government’s further statement that “It will remain the case that no English onshore wind project can proceed without the consent of the local community.” Currently government guidance provides that no planning consent for wind energy development is to be granted unless firstly the site is in an area identified as suitable in a local plan; and secondly, it can be demonstrated that the proposal has community backing. The consultation document does not specify how Local Communities could actually have a definitive say or how a developer could evidence it has engaged appropriately.
How will developers mitigate such rules? Clearly by engaging with communities as recommended by the proposals, though this may not be so easy given the decision in R (Wright) v Resilient Energy Severndale Ltd. More generally, developers need to involve themselves in the development of local plans, to ensure area are designated as suitable for renewable development, and they also need to be prepared to challenge unreasonable decisions by judicial review where appropriate.
This is, of course, all the subject of a consultation so we must wait to see how the renewable energy sector and local community groups react, and more importantly how the Government responds. That said, developers should build the proposals into their plans on the assumption they will be incorporated into law more or less unaltered. They should also respond to the consolation: the deadline for submission is 22 May 2020.