Guides & Advice

Government support for renewable energy battery storage

Published: 27th January 2021
Area: Corporate & Commercial
Two new pieces of legislation came into force at the end of last year; the Electricity Storage Facilities (Exemption) (England and Wales) Order 2020 and the Infrastructure Planning (Electricity Storage Facilities) Order 2020.

When used together, they have the potential to significantly help the UK meet its target to achieve net zero carbon emissions by 2050.  This new legislation removes several complex and costly barriers to the development of battery storage facilities – a vital part of the jigsaw in being able to store and use green energy.

The long-awaited Energy White Paper, the Government’s road map to achieve that target, was published on 14 November 2020,  emphasising the need for investment in green energy infrastructure and in particular battery storage technology. Prime Minister Boris Johnson wants the UK to “harvest the wind” and become to wind what “Saudi Arabia is to oil”.

What is battery storage?

Battery storage is a way of storing energy generated from renewable sources, such as solar or wind.  A typical facility is a large warehouse filled with bookcase sized batteries that can store the energy generated from these sources until it is needed. Kwasi Kwarteng, Minister for Energy and Clean Growth, states that “the key to capturing the full value of renewables is in ensuring homes and businesses can still be powered by green energy even when the sun is not shining, or the wind has stopped blowing”.

Using batteries to store more green energy and leveraging the fast response time of batteries to utilise energy exactly when it is needed means operating the electricity system as efficiently as possible and consequently keeping costs down for consumers.  However there are significant implications and advantages for businesses too and batteries will support the UK’s ‘smarter electricity grid’, estimated to save the UK energy system up to £40 billion by 2050.

How is the Government supporting renewable energy battery storage production?

The recently published Electricity Storage Facilities (Exemption) (England and Wales) Order 2020 simplifies the complex regulatory position and removes the need under the Electricity Act 1989 for consent to the construction, extension or operation of onshore renewable energy battery storage facilities with a capacity above 50 MW and offshore battery storage facilities above 1MW.   Combined with complementary new planning legislation, the Infrastructure Planning (Electricity Storage Facilities) Order 2020 means that consent for all such projects will simply be progressed at the local planning level rather than as part of the more involved NSIP regime and/or section 36 process.

These two new pieces of legislation do away with the complex regulatory and planning landscape that currently exists for the creation of offshore and onshore projects.  Currently for creating offshore projects of between 1MW and 100MW capacity, consent under section 36 of the Electricity Act 1989 is required. For offshore projects over 100MW, planning consent is required pursuant to the National Significant Infrastructure Projects (NSIP) regime. Similarly, such consent is required for onshore projects of more than 50MW and no consent is required under section 36. Where a section 36 consent was required, planning consent at the local planning level was also required but could often be deemed to have been granted by the relevant authority.

What does this mean for the future of green energy?

These welcome legislative changes remove a substantial, confusing and costly barrier to creating larger renewable energy battery storage facilities. All of this could mean a clearer route to investing in and creating green energy projects, as well as a greater and more consistent return on investment given the reduced costs and increased stability.

Supporting this powerful investment potential is the recent announcement of the Government’s intention to issue its first green bond in 2021, facilitating investment into green infrastructure at low-interest rates and providing a steady and stable source of income to investors. Regulatory compliance concerns are reduced and investment in battery storage becomes more viable.

The new legislation could also mean landowners looking to repurpose agricultural or other land could see an uptick in demand for renewable energy battery storage facilities on their land, either pursuant to outright freehold sale or on a medium to long-term leasehold basis.

This welcomed simplifying of the regulatory and planning process is crucial to providing long term sustainable energy for our society, and provides great opportunities for further property investment.

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For further information, contact Ben Darlow or another member of the real estate team in your local office.

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