Planning for the future of energy storage – follow-up consultation

In April, we wrote a blog about a consultation held by the Department for Business, Energy and Industrial Strategy (BEIS) on proposed changes to the treatment of energy storage under the planning system. This consultation, which ran from January to March 2019, applied to England only.

On 15 October 2019, BEIS published its response to the January consultation, together with a follow-up consultation which applies to both England and Wales.

What was the result of the January consultation, and why is a follow-up consultation now being held?

January 2019 consultation

According to BEIS, just over 30 responses to the initial consultation were received, from storage developers, industry bodies, local authorities and energy suppliers/generators.

Most respondents rejected the proposal to retain the Nationally Significant Infrastructure Project (NSIP) regime 50MW capacity threshold for standalone storage projects, citing this as a significant barrier to the deployment of standalone storage projects above this threshold. BEIS also proposed to amend the Planning Act 2008 (PA 2008) so that, where the capacity of the storage and non-storage elements are over 50MW in combination but less than 50MW individually, the generating station would come under the Town and Country Planning Act 1990 (1990 Act) regime. Whilst there was broad support to create a new capacity threshold for composite storage and generation projects, feedback from respondents outlined a concern that this would create a loophole whereby a large storage facility could avoid the NSIP regime by installing a small wind turbine.

Government response and follow-up consultation

Having considered the evidence received as a result of the initial consultation, BEIS has “updated” its policy position.

The new consultation proposes a twin-tracked system:

  • For pumped hydro storage projects, the 50MW NSIP threshold would be retained as, for these projects, the NSIP regime is considered to be more efficient and appropriate because of their larger planning impacts and the fact that they often require other consents (eg authorisation for compulsory acquisition of land) which can be provided through a Development Consent Order (DCO).
  • All other electricity storage projects should be governed by the town and country planning regime:
    • In England, the 1990 Act will govern all non-pumped hydro storage projects unless directed by the Secretary of State.
    • In Wales, all non-pumped hydro storage projects will also be governed by the town and country planning regime, as the current threshold of 350MW will be removed.

The Government has also published draft legislation implementing these proposals, and clarifications regarding the application of permitted development (PD) rights and the Environmental Impact Assessment (EIA) regime to electricity storage facilities.

The closing date for the follow-up consultation is 10 December 2019. It will be for whichever government is elected on 12 December 2019 to decide how to take forward responses received.

Catherine Howard
Catherine Howard
Partner, Planning, Real Estate, London
+44 20 7466 2858
Alistair Paul
Alistair Paul
Associate, Planning, Real Estate, London
+44 20 7466 2252

Consultation on new permitted development rights for telecomms apparatus

Recently, the government announced a consultation on proposals to reform permitted development rights (PD rights) for operators under the Electronic Communications Code (Code Operators). The aim of the proposals is to support 5G technology and extend mobile coverage. Four new PD rights are proposed, two of which would require prior approval from the local planning authority (LPA), two of which would not. Bearing in mind the infrastructure that will be needed for greater mobile coverage and to get ready for 5G, and considering the potential impact on them of the proposed rights, landowners and developers should consider taking the opportunity to respond to the consultation.

The PD rights proposed are to enable the deployment of radio housing equipment on land (apart from on Sites of Scientific Interest) and the strengthening of existing masts for 5G upgrades and mast sharing. These rights would not require “prior approval” from the LPA, which means that the LPA would not need to be notified before the rights are implemented by Code Operators and will not therefore have an opportunity to take into account the interests of other parties such as landowners, occupiers or neighbours. PD rights are also proposed for the deployment of “building-based” masts nearer to highways, and higher masts for for better mobile coverage and mast sharing, although both of these rights would require prior approval.

A recent decision reminds landowners that they can face a tough test when trying to resist the imposition of Electronic Communications Code rights in favour of operators. In EE Ltd v Chichester [2019] UKUT 164, where a landowner tried to resist the imposition of the Code by a mobile phone network operator by claiming that they wanted to redevelop the land on which a mast stood, the Upper Tribunal (Lands Chamber) confirmed that a landowner had to demonstrate “both that they have a reasonable prospect of being able to carry out their redevelopment project and that they have a firm, settled and unconditional intention to do so”. Landowners will have even less control over their land if the proposed PD rights are progressed. However, some comfort may be gained from another recent decision, Mawbey v Cornerstone Telecommunications Infrastructure [2019] EWCA Civ 1016, where the Court of Appeal discussed whether or not a central support pole was a “radio mast” – in this case, it was decided that such poles were indeed masts and that they therefore did not have the benefit of PD rights.

The government says that they will consider responses to this consultation and that another consultation on more detailed proposals wil be held in due course.

For further information, please contact:

Fiona Sawyer
Fiona Sawyer
Professional support lawyer, planning, London
+44 20 7466 2674
Matthew White
Matthew White
Partner and head of UK planning practice, London
+44 20 7466 2461

Mandatory Biodiversity Net Gain, in due course…

DEFRA released their response to the responses on the consultation in relation to the proposals for mandatory 10% biodiversity net gain in July, with it having been confirmed by the (then) Chancellor of the Exchequer in the Spring Statement that the forthcoming Environment Bill would mandate biodiversity net gain for development (housing and commercial, not nationally significant infrastructure projects (NSIPs)) in England. The release of the response was preceded by the (then) Communities Secretary ordering all “house builders” to build highways for hedgehogs and homes for frogs, newts and birds (albeit a few swift bricks may not meet the 10% requirement which is to be calculated using the Natural England Biodiversity Metric 2.0) and at the same  time the publication of updates to the PPG regarding what biodiversity net gain is and how it can “in appropriate circumstances” be achieved. These are positive steps towards improving the biodiversity of the Country, whilst we embark on one of the largest programmes of redevelopment since the decades after the second world war to address the housing crisis and deliver the infrastructure needed to support it.

But we are yet to see the proposed primary legislation to mandate net gain, and as is normally the case the devil will likely be in the detail. The DEFRA response identifies the need for the government to do more work to address viability concerns raised at the consultation to ensure the net gain requirement does not hinder housebuilding, though it remains unclear how this concern is to be addressed. Further, the response identifies exemptions which are to be set out in secondary legislation in relation to sites that do not contain habitat to start with, minor residential developments, development of specific ownership types (such as residential self-build) and targeted exemptions for brownfield sites which “face genuine difficulties in delivering viable development”, though quite how those exemptions will be provided for is not yet known. In addition, how transitional provisions will operate to subject applications for reserved matters in respect of schemes with outline planning permission to the net gain requirements is an issue not yet addressed.

The Environment Bill is due to be introduced in the second session of Parliament (likely to be October 2019 to ensure that the measures in the Bill are introduced before the end of the implementation period in December 2020). The passing into law of the Act will follow, and secondary legislation will subsequently be introduced to confirm the finer details. Of course, the Environment Bill serves a wider purpose than just biodiversity net gain and as such the date for its introduction may be subject to further change. It may be some time before we fully understand biodiversity net gain requirements, and some time after that before it becomes mandatory.

Author: Martyn Jarvis, senior associate, planning, London

For further information please contact:

Martyn Jarvis
Martyn Jarvis
Senior associate, planning and environment, London
+44 20 7466 2680
Catherine Howard
Catherine Howard
Partner and head of environment, London
+44 20 7466 2858

Planning for the future of energy storage

The emergence of renewable energy such as wind and solar has brought about the need to store the electricity that is generated when it is not needed. Technological advancements mean that it is becoming increasingly feasible to store large quantities of energy in small-scale facilities. Electricity storage therefore provides vital flexibility to the UK’s energy system, supporting the growth of low carbon technologies. The government’s objectives of ensuring security of energy supply, keeping bills as low as possible for consumers and decarbonising cost-effectively will be further supported by recognising that in the not too distant future storage will become an integral part of many large-scale, energy-intensive developments, such as universities, hospitals, hotels, restaurants and retail outlets. Batteries can store energy when prices are low and then release it when they are high, thereby potentially becoming a source of income (or at least cost-saving) for these types of developments. The planning system should be keeping pace with technological advancements in this sector so as to avoid distorting the growth potential of this important asset class.

This post considers the current regimes governing electricity storage, their effect, and the potential impact of proposals recently consulted on by the government.

What are the current regimes governing electricity storage?

Electricity storage projects are subject to the same planning regimes as electricity generation projects: projects with a capacity of up to and including 50 Megawatts (MW) must be consented via the Town and Country Planning Act 1990 (“TCPA”) (planning permission) route; whereas projects with a capacity of more than 50MW fall under the Nationally Significant Infrastructure Planning (“NSIP”) regime, requiring a Development Consent Order (“DCO”).


What has been the effect of this?

Since the NSIP regime was introduced, developers have had to consider whether it is better to design a sub-50MW scheme that will benefit from a quicker and cheaper route through the planning system, or a larger and potentially more valuable scheme that has to navigate a more expensive and time-consuming consenting process. This is against a background of technological advancements and reduced cost-based barriers to market, as the relative cost of lithium-ion batteries is falling rapidly due to the expansion of electric vehicles and consumer electronics markets. Whilst storage is currently a relatively small asset class in the UK generation market, it is expected to grow significantly in the years to come, as set out in the Government’s Clean Growth Strategy. The regulatory environment, therefore, needs to respond to market changes and not act as a barrier to developers’ investment and sizing decisions.

Consultation proposals

Earlier this year, BEIS consulted on the threshold for electricity storage projects. BEIS sought views on its proposals to:

  • retain the 50MW capacity threshold that relates to standalone storage projects; and
  • to establish a new capacity threshold for composite projects whereby if the capacity of the storage and non-storage elements individually is less than 50MW then the relevant route for obtaining consent would be the TCPA, not the NSIP, regime.

Potential impact and analysis

Clearly there are difficulties with setting thresholds that apply to a wide range of generation assets, but planning applications should be determined at the appropriate level depending on the proposed project’s size, environmental impacts and national significance. The key question for BEIS, therefore, should be whether the planning system is continuing to ensure that the route to securing consent is proportionate to the anticipated effects of the project.

On this, it is worth noting that BEIS’s analysis, which underpins its current position on retaining the 50MW threshold for standalone projects, did not factor in the possibility that the existing system may be incentivising developers to submit separate rather than joint planning applications in order to avoid triggering the NSIP threshold. This is somewhat surprising, and it will be interesting to see if consultees produce examples of subdivision of projects or developers designing projects sub-optimally to avoid triggering the threshold. If there is clear evidence of this type of market distortion, then BEIS will have to consider whether the 50MW threshold, which is relevant to both proposals, remains fit for purpose.

The BEIS consultation (and this blog) focuses on the planning system in England, but the devolved government in Wales has (as of 1 April 2019) removed electricity storage projects from their definition of “generating station” meaning that all such projects with a generating capacity of up to 350MW will now be decided by local planning authorities as opposed to the Welsh Government under its Developments of National Significance regime. Perhaps the Welsh Government’s move will act as a sign to BEIS that the 50MW DCO threshold is too low and that greater flexibility in the planning system should be afforded to energy generation projects of this size.

It seems as though the planning system will have to adapt as technology advances and we place greater reliance on storage to facilitate and support renewable energy. Looking further into the future, the planning system should also not dissuade developers of large-scale schemes from considering how storage might be integrated into their developments. As such, whatever the outcome of the recent consultation, we expect this debate to be revisited in the years to come and for there to be a wider range of stakeholders involved.

Author: Alistair Paul, Associate, Planning, Real Estate, London

For further information please contact:

Catherine Howard
Catherine Howard
Partner, Planning, Real Estate, London
+44 20 7466 2858
Alistair Paul
Alistair Paul
Associate, Planning, Real Estate, London
+44 20 7466 2252

Changes confirmed to permitted development rights and use classes

In our blog post of 10 December 2018 (see here), we discussed the potential impact on developers and landlords of changes to permitted development (PD) rights and Use Class A which were being consulted on by the government. Despite widespread criticism, and counter to some calls for a greater role for local authorities in securing the futures of their town centres through holistic town planning, in a Written Statement on 13 March 2019 James Brokenshire announced that the government is implementing the majority of the proposals. Some of the changes to PD rights are to be made later this spring; other changes, such as upward extensions for residential use, will be dealt with in further regulations in the autumn. We were also told that we can expect an Accelerated Planning Green Paper later this year. Whilst the changes are intended to “[simplify and speed up] the planning system, to support the high street, make effective use of land and deliver more homes”, whether this can be achieved by these changes remains to be seen. This post discusses what the changes are, and what their impact could be within the context of wider change. Continue reading

Ousting unauthorised occupiers! Government consults on dealing with trespassers 

The word “trespasser” may well send a shiver down the spine of many commercial landowners.  Trespass can take a number of different forms, from squatters in empty commercial buildings, to travellers on empty land, or protestors occupying land to gather publicity for a particular cause. While squatting in residential buildings is now a criminal offence, the criminal law does not so easily assist for commercial land. Instead, regaining possession of commercial land following incursion by trespassers can be a fraught, costly and time-consuming exercise for the landowner, often involving court proceedings and bailiffs, and resulting in an expensive clean-up and repair operation after possession is obtained. There is now an opportunity for landowners, developers and other interested parties to comment on proposals for improving the system.

The Government’s recently announced consultation on “Powers for dealing with unauthorised development and encampments” is welcome recognition that the current system needs to be strengthened to give greater powers to commercial landowners to deal with trespass incidents swiftly and without having to incur significant expense. Although the consultation is expressed to be directed predominantly at what the Government terms “unauthorised encampments” set up by the travelling community, given the statutory mechanisms for dealing with trespass are essentially the same for all categories of trespass on commercial land, the consultation has the potential to benefit commercial landowners more broadly.

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Commercial Service Charges – the RICS consults on proposed mandatory requirements

Commercial property practitioners and stakeholders have just under a week left to have their say on the draft text of the 4th edition of the RICS Code of Practice: Service Charges in Commercial Property (the “Code”), which is due to come into effect on 1 April 2018.  This professional statement will replace the 3rd edition of the Code, which is the RICS’s current best practice guidance.

In this blog post we look at what the proposed changes are and how landlords will be affected.

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CRC Reform – Energy usage to be reported in financial statements

News of what is to become of the CRC (formerly Carbon Reduction Commitment) Scheme post-2019 has finally arrived, in the form of a new Government consultation from the Department of Business, Energy and Industrial Strategy (BEIS) issued on 12th October 2017*:

  • the obligation to buy allowances to cover energy usage will cease and be replaced by an increase in the rate of the Climate Change Levy (CCL) – a longstanding tax on high energy usage;
  • instead of reporting to the Environment Agency, disclosure of energy usage is proposed to form part of a company’s financial statements.

Disclosure in the accounts is designed to bring to the attention of the Board (and other stakeholders such as potential investors) the potential for cost savings through implementation of energy efficiency measures and thereby to contribute to Government policy in the area of climate change and energy security.

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Express your views on the proposed new electronic communications code

The Department for Culture Media and Sport (DCMS) has published a consultation on reforming the existing Electronic Communications Code – the legislative framework that regulates the relationship between telecoms operators and landowners who provide sites for the installation of telecoms apparatus. The consultation seeks views on a revised code which is now set out in a stand-alone draft Bill. This follows the Government's unsuccessful attempt, in January 2015, to introduce the revised code as an amendment to what was then the Infrastructure Bill (see also our previous e-bulletin here).

 

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