The new Conservative Government has made curbing the growth of onshore wind one of its short-term priorities. On 18 June 2015, the Department of Energy and Climate Change (DECC) confirmed the Government’s intention to implement the Conservatives’ 2015 General Election manifesto promise to “end new public subsidies for onshore wind” by “legislating to close the Renewables Obligation across Great Britain to new onshore wind generating stations from 1 April 2016″.
DECC has stated that “up to 5.2GW of onshore wind capacity could be eligible for grace periods which the Government is minded to offer to projects that already have planning consent, a grid connection offer and acceptance, as well as evidence of land rights”. The future treatment of onshore wind under the separate Contracts for Difference and Feed-in Tariffs regimes remains to be clarified.
Industry has not been slow in condemning the chilling effect which the Government’s announcement will have on many projects. But what can they actually do about it?
The Renewables Obligation (RO) is scheduled to be closed to new projects on 31 March 2017 in any event (subject to some grace period arrangements) as part of the transition to the Contracts for Difference regime being the primary subsidy vehicle for large-scale renewables projects. The early closure for onshore wind echoes the treatment of >5MW solar projects, to which the RO was closed on 31 March 2015, subject to one-year grace periods both for projects already holding planning consent, grid connection offer and acceptance and evidence of land rights, and for projects which only failed to commission in time to be accredited by 31 March 2015 because of grid delays.
The early closure of the RO to >5MW solar was effected by an “RO closure order”: a piece of secondary legislation which Ministers were given powers to make (subject to Parliamentary approval) under the Energy Act 2013. Ministers could, of course, use the same method in the case of onshore wind, but the DECC announcement states that the closure of the RO for onshore wind will be achieved by primary legislation – i.e. a Parliamentary Bill. This means that there will be no statutory obligation to consult on the proposals before they are put to Parliament. It also means that they will receive vastly more Parliamentary scrutiny: when a draft order is put before Parliament, it is presented on a take-it-or-leave-it basis and it is seldom debated for more than an hour by a handful of MPs or Peers. In the vast majority of cases, the draft is approved. By contrast, any provision that is put before Parliament as part of a Bill is capable of being amended or made the subject of counter-proposals. So the industry can fight back by lobbying MPs and Peers, and the Government’s Commons majority may or may not be strong enough to make it impossible for those seeking a less harsh outcome for onshore wind projects to make some headway.
Before the 18 June announcement, there was much talk of possible legal challenges to the expected ending of onshore wind subsidies. However, DECC’s decision to use primary legislation makes judicial review a less promising avenue for the industry. A recent judgment in a case relating to changes to solar subsidies has made it clear that in certain circumstances a Government decision to consult on proposed subsidy cuts can be challenged in itself (even if there is no subsequent decision to implement the proposal). The same case has clarified the range of circumstances in which projects which have not yet achieved accreditation under a subsidy scheme can nevertheless still make a claim for damages as a result of a change in subsidies. However, if the next thing that Government does is to introduce provisions to implement the closure of the RO to onshore wind in its forthcoming Energy Bill, it is doubtful whether that action could be judicially reviewed. Unlike a decision to make a piece of secondary legislation, or to consult on doing so, which are executive acts, a Minister’s decision to put forward a Bill is something that he or she does in his or her capacity as a Member of Parliament. As such, it may well be considered by the Courts to fall within the category of “proceedings in Parliament” which are not judicially reviewable. One possible trump card for the industry might be to find a way of characterising the proposed legislation as contrary to EU law: no doubt some opponents of onshore wind (inside and outside Parliament) would relish that.
The industry – using the language of judicial review – has attacked the early closure as “irrational”. The justification being put forward for ending the onshore wind subsidy early does not appear to be one of affordability or the impact that the amount of subsidy budget (the “Levy Control Framework”) that wind would consume might have on support for other types of renewable generation (as in the case of >5MW solar, where a claim for judicial review was firmly dismissed). Rather, it is stated that “we now have enough subsidised projects in the pipeline to meet our renewable energy commitments”. In this context it is interesting that a few days earlier, the European Commission published a status update on EU Member States’ prospects of meeting their 2020 renewables deployment targets that showed the UK as being one of a number of Member States that need to “assess whether their policies and tools are sufficient and effective in meeting their renewable energy objectives”.
The subsidy change is explicitly linked to the parallel commitment to “give local communities the final say over any new wind farms”, fleshed out in a statement from the Secretary of State for Communities and Local Government on the same day. But whilst the subsidy changes would apply throughout Great Britain (the content of the RO being for DECC Ministers to determine), the planning regime is more of a patchwork. Hitherto, broadly speaking, onshore wind projects up to 50MW were consented by local planning authorities (everywhere), while applications to develop projects of 50MW or above fell to be determined by DECC Ministers in England and Wales and Scottish Ministers in Scotland. It is now proposed that all wind farm applications in England will be decided locally, and that planning permission should only be granted if “the development site is in an area identified for wind energy development in a Local or Neighbourhood Plan”. This gives English local authorities who do not wish to see wind farms in their area much greater ability to refuse them planning permission. In Wales, under the St David’s Day Agreement, there are moves to devolve consents for projects up to 350MW to Welsh Ministers. But before that happens, a number of old consent applications for >50MW onshore wind projects in Wales that have attracted considerable opposition and been the subject of a public inquiry are likely to be decided by DECC Ministers. In Scotland, where >50MW consents are already devolved, no changes made by Ministers in Whitehall in relation to consenting will have an effect, but the subsidy changes will probably have a much greater negative impact on future projects throughout Great Britain than any decisions taken by planning authorities or Ministers on consents.
It could be said that all this is simply democracy at work. There is a broad strand of Conservative opinion that is anti-onshore wind. The Conservative Party sent a clear signal of its intentions in regard to onshore wind in its manifesto. It won the election. Of course, it didn’t do very well in Scotland, but while most of the big onshore wind farms are in Scotland, the money to support them under the RO mostly comes from England, where the largest number of consumers (who pay for subsidies in their electricity bills) live. No doubt there will be lively debates on the provisions of the current Scotland Bill that proposes (very limited) further devolution of energy matters to the Scottish Government, as well as on the provisions of the forthcoming Energy Bill on closure of the RO to onshore wind. But it hardly needs saying that however politically exciting the process may be, it does not provide a stable background for investment in what is apparently still the cheapest form of renewable generation – and one which new research suggests could also be made a lot quieter and more efficient, thus removing some of the stronger potential non-aesthetic objections to it.