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) increased the NSIP threshold to 350MW, meaning that non-wind onshore energy generation projects with capacity of between 10MW and 350MW will now be decided by the Welsh Government under its Developments of National Significance (“DNS”) regime. There is no equivalent DNS regime in England but 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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Review of unviable affordable housing obligations to cease on 30 April 2016

Author: Matthew White, Partner and Head of Planning, London

Developers with planning permission for residential development can currently apply to renegotiate affordable housing obligations which have become economically unviable.  However, this review mechanism will cease to be effective on 30 April 2016. Therefore applicants have until this date to apply to renegotiate, and later requests will not be considered. 

The review mechanism was introduced as a temporary measure in 2013 (under new sections 106 BA-BC of the Town and Country Planning Act 1990) to assist stalled schemes, and it was due to end on 30 April 2016.   According to the Government's Spending Review and Autumn Statement 2015, the mechanism was going to be extended to 2018.   However the Department for Communities and Local Government (DCLG) has confirmed to us that the provisions will in fact cease to be effective on 30 April 2016, as originally stated in the legislation.  DCLG accept that this is a change in direction from the autumn statements but state that they are not planning to make a formal announcement on the matter at this stage. 

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Demolition in Conservation Areas – no permitted development rights

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Since 1 October 2013 Conservation Area Consent has not been necessary for demolition of an unlisted building or enclosure in a conservation area, but the requirement now is to obtain approval for the demolition by planning permission (a change introduced by the Growth and Infrastructure Act 2013). Failure to receive approval before such demolition is a criminal offence.

It is important to note that the permitted development right for demolition of buildings is not available in relation to unlisted buildings in a conservation area. This means that if you want to demolish an unlisted building in a conservation area you must obtain express planning permission from the relevant planning authority.

For more information please contact:

Charlotte Dyer
Charlotte Dyer
Senior Associate, Planning, London
+44 20 7466 2275