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

Amending the status quo on reserved matters approvals

Making amendments to details submitted as reserved matters on large development schemes can pose difficulties – until now there has been no specific authority that non-material amendments could be made to reserved matters approvals (RMAs), although it has frequently been done in practice. A recent Court of Appeal decision, R (on the application of Fulford Parish Council) v City of York Council [2019] EWCA Civ 1359, has the potential to make things a lot more straightforward, providing authority both for non-material amendments to RMAs (save for the extension of time) and for the conditional grant of RMAs.

Background

Fulford v York relates to a residential scheme on land at Germany Beck in Fulford, York, which has been the subject of more than one challenge. The issue at the heart of this case is the power of a local planning authority under section 96A of the Town and Country Planning Act 1990 (1990 Act) to amend a planning permission relating to land in its area, provided it is satisfied that the change is not material. The question for the Court of Appeal to consider was whether the power under section 96A could not extend to reserved matters approvals because such approvals are not “planning permissions”.

Fulford argued that it was unlawful for the local planning authority (York) to approve a non-material amendment to a condition attached to a RMA because section 96A did not empower York to make that decision. This was because, they argued, an approval of reserved matters is not a planning permission. The thrust of Fulford’s argument was that legislation and case law maintain a clear distinction between a “planning permission” on the one hand and an “approval” on the other, and nowhere in the 1990 Act does it say that the approval of reserved matters is an application for planning permission.

Lewison LJ, who gave the leading judgment, accepted that the approval of reserved matters is not, itself, a planning permission and that an application for such approval is not, itself, an application for planning permission; however, he held that the “planning permission” to which section 96A refers is the package consisting of the grant of planning permission itself, together with any conditions to which the grant is subjected, whether the conditions are imposed at the time of or subsequent to the grant of permission. On this point, Lewison LJ confirmed that it is lawful for local planning authorities to give conditional approval to reserved matters, provided of course that such conditions are within the scope of what has been reserved at the outline stage for subsequent approval. Lewison LJ went on to state that “an application for an amendment to an approval (or conditional approval) of reserved matters is an application for alteration of an existing condition; which is expressly permitted by section 96A(3)(b)”.

The decision makes clear that the one condition that cannot be overridden using section 96A powers is a condition limiting the time within which development must be begun or an application for the approval of reserved matters must be made (section 73(4) of the 1990 Act). However, LJ Lewison saw no good reason for outlawing non-material changes made after the reserved matters time limit if the original approval of reserved matters had been made within the relevant time limit.

A persuasive point made by Mr Cannock QC for the developer was that in order for a local planning authority to decide whether to exercise its powers under section 96A it must be satisfied that the proposed change is not material. Whilst materiality was not at issue in Fulford v York, Mr Cannock submitted that in order to carry out this assessment, the local planning authority cannot merely consider the original outline permission and its conditions; it must also consider the details of reserved matters that have been subsequently approved. Mr Cannock made the point that “[i]f a developer were to ask: what development is permitted by the outline permission, the only possible answer is that the permitted development is to be found in the package consisting of the outline permission, any approval of reserved matters, and any subsequent non-material changes.”

Comment

This decision should be welcomed by developers who make use of outline or hybrid planning permissions. Section 96A powers were introduced almost 10 years ago with the intention of building flexibility into the planning system; however, because of the ambiguity in the 1990 Act as to whether non-material amendment applications can apply to reserved matters approvals, planning professionals and local authorities alike have tended to take a cautious approach because of the risk of challenge. This has resulted in an inherent lack of flexibility on larger, more complex mixed-use schemes, which, ironically, are exactly the types of developments that would benefit most from the flexibility offered by the informal section 96A procedure.

It wouldn’t be surprising if this decision ends up in the Supreme Court – not only due to local opposition to the scheme, but also because this decision offers a new perspective on the interpretation of this area of law. But, for now at least, this Court of Appeal decision provides developers, advisers and local authorities with a reasoned justification for a very sensible practice that had been tacitly accepted for years without express authority.

Author: Alistair Paul, associate, planning, London

For further information please contact:

Alistair Paul
Alistair Paul
Associate, planning, real estate, London
+44 20 7466 2252
Matthew White
Matthew White
Partner and head of UK planning practice, London
+44 20 7466 2461

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

Silence is Consent: Developers must pay attention to draft pre-commencement conditions

Developers beware – if you don’t agree with a pre-commencement condition in draft, you could have to express your disagreement in writing within 10 working days, or risk the authority imposing it in a planning permission anyway.

The government is currently consulting on changing the procedure for imposing pre-commencement conditions in planning permissions, with regulations expected to be in force in April 2018.  After this date, developers must be proactive in deciding whether or not they agree with the terms of any proposed pre-commencement conditions. If they do not agree, they must respond within 10 working days of receipt of a notice from the authority indicating their disagreement or providing comments. In the absence of a response, the authority can proceed to grant permission with the pre-commencement condition.

This is intended to prevent unnecessary delays to decision-making. However, it will create an extra burden on developers, particularly those with multiple applications being considered in parallel or where the authority is seeking to impose a large number of pre-commencement conditions. Given the continued extensive use of pre-commencement conditions, this is likely to have far reaching impacts on developers across England. The consultation is open for responses until 27 February 2018.

Set out below is a quick recap of the current position and a brief explanation of the latest proposals.

1.Restriction on pre-commencement conditions

2. Exemption from the need to obtain written agreement

3. Commentary

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Reasons to be cheerful

It is good practice for a local planning authority to give reasons for the grant of planning permission. Failure to give adequate reasons may be serious enough to justify quashing the permission.

There is a statutory duty to give reasons for the grant of permission for EIA development.  However, even if it is not EIA development, reasons will need to be given where the grant of permission does not follow the planning officer’s recommendation; where the development would not comply with planning policy; and where there is significant public interest in the proposals. The law on the duty to give reasons was summarised and confirmed recently in a Supreme Court case, Dover District Council v CPRE Kent (2017) UKSC 79.

1. Background

2. Supreme Court

3. Comment

 

1. Background

The Dover case related to a planning application for a large residential development in an area of outstanding natural beauty (AONB). Before the local authority granted permission, the planning officer’s report had made several recommendations, including reducing the number of residential units, to reduce the harm caused to the AONB. The report stated that this would preserve scheme viability and retain the economic benefits of the development, which helped to provide the finely balanced exceptional justification needed for causing harm to the AONB. The officer’s report also recommended implementation as a ‘single comprehensive scheme’ to secure those economic benefits (including a hotel and conference centre) and conditions or planning obligations to achieve this.

Planning permission was granted by the local authority without following these recommendations. No reasons were given by the local authority for this departure from the officer’s report.

2. Supreme Court

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Intellectual property issues for purchasers of development sites

Authors: Rachel Montagnon, Professional Support Consultant, Laura Deacon, Of Counsel, and Joanna Silver, Senior Associate, Intellectual Property, London

A recent case reminded us that a range of IP issues can sometimes be overlooked when purchasing development sites. Some relevant questions that purchasers may not immediately consider include:

  • Does the development have a distinctive name or logo?
  • Is there a website associated with the development?
  • Are there social media accounts that specifically relate to the development?
  • Do you have permission to use the architect’s drawings to promote the development?

If any of the above apply, intellectual property issues could cause problems if not identified early on.

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Grants of planning permission against officer recommendation – managing the legal risk

Author: Annika Holden, Associate (Australia), Planning, London

The Court of Appeal has recently upheld challenges in two cases where planning permission was granted by planning committee against officer recommendation (see Oakley v South Cambridgeshire District Council & Anor [2017] EWCA Civ 71 and Campaign To Protect Rural England, Kent (CPRE), R (On the Application Of) v Dover District Council [2016] EWCA Civ 936). From a legal perspective, Oakley is particularly interesting as a rare look by the Court of Appeal at the question of whether planning authorities have a general common law duty to give reasons on the grant of planning permission – see the excellent e-bulletin from my public law colleagues here for more on that. On a practical level, the cases represent a good reminder of how carefully all parties need to tread whenever planning permission is granted against officer recommendation.

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An unusual consequence of the housing crisis – or, when is it against public policy to enforce a hospice’s privacy?

Author: Jerome Temme, Trainee, Real Estate Dispute Resolution, London

Take a hospice, a restrictive covenant preventing development next door which, at the time of the development, served to protect the privacy of the sick children, their families and visitors, and a developer in knowing breach of that restrictive covenant. Usually, parties acting in deliberate breach of their obligations will not find favour in the courts. Yet, in the recent case of Millgate Developments and another v Smith and another [2016] UKUT 515 (LC) a Tribunal used its discretion to modify the restrictive covenants and effectively let the developer keep its building up. So what made the difference in this case?

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Sky’s the limit?

Author: Helena Thompson, Associate, Planning and Environment, London

Almost a month on, we have now all had a chance to consider what the Housing White Paper means for the future of housing. The planning team here at Herbert Smith Freehills have been asking ourselves – what do we each find most interesting about it? For me, it was the continued protection of the Green Belt and the proposals to build 'up' rather than 'out'. Before local planning authorities can amend Green Belt boundaries, they must first look at the use of brownfield and public sector land and denser building, as well as whether neighbouring authorities can help them out with their development requirements.

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Permission in Principle and Environmental Impacts (2016 Planning Consultation)

Author: Martyn Jarvis, Associate, Planning, London

This Friday (15 April) is the deadline for responses to the Government's 'Technical Consultation on Planning Changes' (launched on 18 February 2016). The consultation sets out the Government's proposals to put flesh onto the bones of the Housing and Planning Bill, including for performance linked planning application fees, a brownfield land register and a Section 106 dispute resolution mechanism.  The consultation paper also considers how the proposals for the grant of "planning permission in principle" will be put into effect. Permission in principle means the grant of automatic planning consents for housing led developments where further technical details will be provided at a later date.

In this post we discuss how the permissions in principle will fit with existing requirements for environmental impact assessments.

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