Summary

The UK’s energy storage industry is making huge strides – and the regulatory regime is having to catch up fast. This blog explores the latest proposals from the UK Government as to how energy storage schemes can be consented in the planning process.

The planning system in England and Wales is playing catch-up with the pace of change for energy storage projects. Due to this, the UK Government consulted earlier in 2019 on how schemes would be dealt with through the planning regime. The Government’s response was issued on 15 October 2019, and this is now being consulted on as a revised set of proposals. This latest consultation runs until 10 December 2019.

Original consultation

A summary of the background to the Government’s original consultation can be found in our blog from January 2019 ‘BEIS – planning for better storage solutions’.

In short, there were two main discussion points:

  1. Whether to retain the 50 megawatt (MW) Nationally Significant Infrastructure Project (NSIP) capacity threshold that applies to standalone storage facilities; and
  2. Whether to amend the Planning Act 2008 to establish a new capacity threshold for composite projects, including storage and another form of generation, such that a composite project in England would only fall into the NSIP regime where either its capacity, excluding any electricity storage, is more than 50MW; or the capacity of any electricity storage is more than 50MW.

The NSIP regime, also known as the Development Consent Order (DCO) regime was created in 2008 to give greater certainty for major UK infrastructure projects so that they would be consented to without undue delay, making it more attractive for international infrastructure investors.

A tale of two regimes…

The main alternative to the NSIP / DCO regime, is the conventional regime of planning permissions (pursuant to the 1990 Town and Country Planning Act), which is designed to cover developments across the spectrum, from the smallest right up to those that just fall short of being ‘nationally significant’. Applications for planning permissions are made to your local Council, as the ‘local planning authority’ (LPA), and are often determined by the LPA. If refused, they can be appealed to a Government inspector for redetermination.

However, the NSIP / DCO regime, has some advantages: (1) your scheme “needs case” can be proved through the ‘National Policy Statements’ (NPS), insofar as there is a valid applicable NPS (noting that the energy NPSs were produced in 2011, and didn’t envisage storage); (2) you can include powers of compulsory acquisition in your DCO; (3) you can also include other consents in your DCO, including changing other legislation; and (4) the decision maker is not the local planning authority but the Secretary of State (in the case of storage, at BEIS), hence for highly controversial schemes, it can be preferable to avoid a local decision making process where local politics can interfere with proper decision making.

On the flip side, the DCO process can take considerably longer than securing planning permission (albeit if your scheme is heading to an appeal, then there may not be much in it) and the DCO process also requires statutory consultation before an application can be made. These factors often mean higher costs in the consenting phase.

Storage – what did the consultation say?

After consultation, the Government has listened and revised its proposals:

“1. Carve out electricity storage, except pumped hydro, from the NSIP regime in England and Wales, meaning that the primary consenting route in England will be under the Town and Country Planning Act 1990 (TCPA). Section 35 of the Planning Act 2008 will continue to apply in England, allowing the Secretary of State to direct projects into the NSIP regime, where she considers it appropriate. In Wales, planning decisions for electricity storage (except pumped hydro) of any size will generally fall to be consented by the relevant Local Planning Authority under the TCPA regime, whereas currently this is only the case for electricity storage (except pumped hydro) below 350MW.

  1. Retain the 50MW NSIP threshold in the case of pumped hydro storage. Due to the larger planning impacts of pumped hydro projects and the fact that they often require other consents (e.g. authorisation for the compulsory acquisition of land) which can be provided through a Development Consent Order (DCO), it may be more efficient for it to go through the NSIP regime than seeking planning permission locally. Therefore, we believe that the NSIP regime remains the most appropriate consenting process for this technology.”

There are a couple of other interesting points addressing ‘permitted development rights’ where planning permission is ‘deemed’ to be granted in certain circumstances (e.g. extending a premises, where storage is an ancillary function), and also circumstances where works are not ‘development’ (in the legal sense(!) – see below) and hence don’t actually need planning permission at all. On the latter point, the example the Government offers, is where storage is installed within an existing premises as a secondary function to the primary use, and there is no external change to the premises – then this ‘would be unlikely’ to be a material change of use and therefore wouldn’t be ‘development’, hence meaning there is no need for a planning permission.

This whole area of law is something that developers of all kinds have been grappling with for decades, and it’s fair to say that developers and LPAs (who enforce planning breaches) can often have viewpoints which start at opposite ends of the telescope. But, with the right advice the shades of grey are totally surmountable.

What about the environment?

Allied to this is the issue of Environmental Impact Assessment (EIA), whereby if your proposals are EIA Development (i.e. they are likely to have significant effects on the environment), then any potential permitted development rights are automatically lost. The consultation paper fails entirely to mention the linked issue of protected habitats, and the UK Habitats Regulations requirements in relation to special protected sites, which is an issue our developer clients often have to grapple with.

Additionally, you may be wondering what Section 35 is all about. Essentially it is an ability to apply to ask for your project to be treated as an NSIP under the DCO regime. Hence if you think that regime is better for you, in light of the pros and cons listed above, then you can make the case to head down that route.

What is storage; and why does that matter?

Historically, there is more than one school of thought on how to classify electricity storage, however there is now some measure of consistency being driven by the Government that battery storage should be treated as a form of generation. In a recent DCO decision in respect to the Drax repowering project, the inclusion of battery storage lead the Government inspectors to conclude that as a matter of law they were not NSIPs. But, the Secretary of State’s decision nipped that in the bud, and was very clear that “the Government’s view [is] that Battery Storage Facilities constitute a form of ‘generating station’” (para 5.2) and hence can qualify as NSIPs for DCO consent. This distinction might just be important if a scheme promoter wanted to avail itself of the DCO regime process.

Where next?

It is encouraging that battery storage is receiving informed attention and support from the Government. This is going to be critical if the nascent industry is to take off and fulfil its potential as a key part of a flexible energy system.

Additionally, the overall conclusion of the revised consultation is good news, and is the result of much hard work by the industry to try to bring forward storage which, amongst other things, can help the UK reduce emissions to net zero by 2050.

Hopefully, the next stage of consultation will be positive and the measures will come into force. This will enable storage promoters to have greater clarity about the consents they need, and is the other factor required to successfully develop a battery storage project, whether as a stand-alone asset or in conjunction with other activities.