A brief overview of the government’s proposals to clarify how the planning system applies to electricity storage projects.
What is the consultation about?
The Department for Business Energy and Industrial Strategy (BEIS) published its consultation 'Proposals regarding the planning systems for electricity storage' on 14 January 2019. Responses are due by 25 March 2019. This follows a commitment by the government to review how electricity storage is treated in the planning system – part of its aspiration for smart, flexible energy and ultimately a low carbon energy system - a key feature of Britain’s Industrial Strategy (see our report on Delivering Industrial Strategy).
The focus of the consultation is to resolve the uncertainties surrounding the 'treatment of composite projects consisting of storage and another form of generation' in England. In other words, when should a storage project be consented under the Town and Country Planning Act 1990 (TCPA) regime by the local planning authority (LPA) and when should it be consented under the Planning Act 2008 (PA) regime by the Secretary of State (SoS)? The aim for regulatory clarity is to promote confidence in the sector and hence encourage investment in and deployment of storage projects. Whilst the questions asked are centred around projects of a size which could meet the threshold for a Planning Act electricity generating nationally significant infrastructure project (NSIP) (over 50MW), the consultation document also outlines how small-scale storage projects are dealt with in the planning system.
What is electricity storage?
The most common form of electricity storage in Great Britain is pumped hydro (where excess electricity is used to pump water to a high reservoir until electricity is needed, at which point the water is released through a hydro power turbine to generate electricity). Recently battery storage technologies have been developed and are being deployed. Other technologies are forecast.
For planning purposes, electricity storage facilities are considered by the government as a form of electricity generating station, though the legislation has yet to explicitly reflect this position.
Current planning issues for composite projects
The government acknowledges that the current regulatory framework, including the planning system, was not designed with electricity storage in mind and this has led to some uncertainty. BEIS has therefore been reviewing various elements of the planning system, including the unit and level of the capacity threshold.
Co-locating a (non-storage) generating station with electricity storage facilities can help maximise the usable output from intermittent low carbon generation. It is currently a matter of planning judgment (e.g. considering proximity of the elements, sharing of infrastructure and interoperability) whether the elements of the project should be treated as a single generating station or as two or more distinct elements. For projects where the combined capacity of the elements is over 50MW, the outcome of that judgment determines whether a project is or is not an NSIP.
Interestingly the BEIS review concluded that planning costs are not considered a barrier to deployment. These are 1-2% of upfront costs, regardless of whether the consent is obtained under the PA regime or the TCPA regime. Instead, revenue streams and connection costs appear to be the biggest driver of decisions to invest in electricity storage. However, developers’ main concerns were linked to EIA requirements; a lack of understanding of storage technologies among planners and local communities; as well as a lack of clarity around how composite projects should be treated.
How does the TCPA apply to small electricity storage projects?
The consultation document clarifies that adding small-scale electricity storage:
- within existing premises;
- to support the premises’ primary use;
- there are no external changes to the premises; and
- the majority of the electricity is used on the premises.
is unlikely to be a material change of use and therefore does not require planning permission. It also highlights to developers that permitted development rights exist for certain business premises and could apply.
What changes are being proposed to the Planning Act 2008?
BEIS is looking for views on whether it should:
- keep the current threshold of 50MW, above which standalone electricity storage projects would be an NSIP and need a development consent order (DCO); and
- establish a new capacity threshold for composite projects so that a project would only need a DCO if either the storage element of the project was above 50MW or the other generation element of the project was above 50MW.
BEIS envisages that composite projects comprising an onshore wind generating station and electricity storage would not fall within the Planning Act regime due to the existing carve out of onshore wind from the regime. BEIS asks whether the legislation needs to be made clearer to reflect this.
Proposals at a glance
What needs to happen next?
Parliament (when time allows) will need to amend the Planning Act to explicitly recognise composite generating stations as a category of NSIP and to stipulate that the threshold capacity. By the time that exercise is complete, perhaps developers’ other concerns will also have been addressed: the public and planners will be more comfortable with electricity storage and the clarity of the consenting regimes will make the analysis of EIA requirements for each project more straightforward.
We have a significant experience assisting developers and funders with electricity projects, including battery storage, of all types and sizes.