New lease of life for onshore wind

A backbench rebellion by Conservative MPs forced the government to relax the de facto ban on onshore wind development, but will that be enough to encourage large-scale investors? David Blackman gathers industry views.

Last week saw Rishi Sunak secured a festive truce on the ever-thorny issue of the planning rules governing onshore wind.

After coming into office just over a month ago, the new prime minister seemed happy to maintain the government’s hostile planning regime for onshore wind in England, which has amounted to a de facto ban on the technology that its backers claim now is the cheapest and quickest way of generating electricity.

However faced by a backbench rebellion against this stance, which attracted the support of his predecessors Liz Truss and Boris Johnson, Sunak’s government unveiled moves that could trigger a relaxation of the planning restrictions on onshore wind farms in England.

The Department for Levelling Up, Housing and Communities announced a commitment to launch a consultation on changes to national onshore wind planning policy.

The government said it would consult on changes before Christmas to the National Planning Policy Framework about how councils make decisions about onshore wind schemes. The consultation will also address consents for grid connections to onshore wind and encourage the upgrading of existing wind farm sites.

However, onshore wind will not be restored to the Nationally Significant Infrastructure Project regime, which dealt with all applications for 50MW-plus developments pre-2016.

Despite this caveat, the government’s change of attitude was an early festive treat for the industry.

Level playing field

“Even just creating a level playing field and ensuring that communities that want it to go ahead can have it is a really, really positive step,” says Adam Berman, deputy director of Energy UK.

James Robottom, head of onshore wind at trade body RenewableUK, agrees. “Politically and symbolically it’s extraordinarily important,” he says.

Zoisa North-Bond, chief executive of Octopus Energy Generation, says: “Now is the time to work closely with local authorities and supportive local communities to identify suitable locations for new wind energy, helping the country to wean itself off expensive gas imports and strengthen its energy security.”

Describing the government’s move as “urgent and overdue”, Ecotricity founder Dale Vince says: “Taking the breaks off this type of renewable energy will kick start a sector of British industry which is ready to build turbines, efficiently without the need of government subsidies.”

The consultation on the changes to the NPPF had not been published when this article went to press, meaning key details about the operation of the local planning regime for onshore wind had not been fleshed out.

But given the political pressure, the government is unlikely to row back now, says Jess Ralston, head of energy at the Energy and Climate Intelligence Unit.

“It’s going to be a bit embarrassing if they then introduce a system that’s so cumbersome they don’t get any onshore wind. If you’re going to change your mind, then you may as well U-turn all the way and actually make it easy.”

Unless uncertainties surrounding local planning are resolved, onshore wind may remain a relatively niche activity, says Robottom: “The real hope is that this will allow some of the smaller projects to get through so UK businesses and communities who are really up for this are able to take control of their energy needs, which is a stepping stone in the right direction.

“The challenge will be commercial wind and whether there’s enough certainty for investors in the supply chain to make moves into that space.”

Given the lead-in times for securing planning permission and grid connections, onshore wind farms brought forward following the government’s announcement probably won’t be delivered until the early 2030s, points out Berman.

Scotland and Wales, where significantly more land is available and wind speeds are often higher, are likely to remain more efficient locations for siting onshore turbines, he says: “We need all the tools in the toolbox to be able to bolster our energy security and put us on the pathway to net zero. This is a really important extra tool in that box but we need to be realistic that this is not going to be a silver bullet.”

This equation could alter if the government pushes ahead with plans to introduce more localised electricity pricing, says Marlon Dey, GB head of research for consultancy Aurora.

Retaining current national pricing would result in a “modest increase” in onshore wind output in England, he says. However, splitting the grid into localised pricing nodes could start to deter onshore wind being built in Scotland, which would make English projects more attractive, says Dey: “That would ultimately depress prices in Scotland and increase the favourability of building in England despite the lower wind speeds that you get in England relative to Scotland.”

Solar boost

Another stocking filler for the industry was a comment last month by environment secretary Therese Coffey that the government is not pressing ahead with moves under Truss’s government to reclassify a large chunk of agricultural land to prevent solar panels being installed on it.

Berman says Energy UK is “delighted” that ministers are no longer actively considering banning the use of solar on 3b class agricultural land, which he describes as “a bizarre” and a “deeply regressive step in the wrong direction”.

Ralston agrees: “This is exactly the time when we should be doubling down on renewables, so it’s encouraging that they [the government] look like they’re waking up to that idea. It’s nonsensical at a time when this is the cheapest power that we can get. If the farmers want it and the public wants it, I don’t know why government would block it.”

To get to the government’s target of 70GW of solar power by 2035 may create tensions between food and energy production, says Robottom: “If you want to get anywhere near that level, the availability of suitable land for solar development is going to come under strain and you might find instances where there’s a bit of conflict between whether you use land for agriculture or for power.”

However, he says, there are solutions, such as placing solar panels on stilts, that would keep the ground free for farming.

Reactive measures

The government’s moves on onshore wind help to plug one of the big gaps identified in the Energy Security Strategy, which was published in the spring, as does its recent commitment of additional cash support for energy efficiency measures.

However, Adam Bell, former head of energy strategy at the Department for Business, Energy and Industrial Strategy (BEIS), argues that the government’s package of measures still don’t add up to a meaningful strategy for reforming the energy system.

The relaxation of planning restrictions on onshore wind, while welcome, came about in an ad hoc fashion after pressure from backbench MPs.

“You’ve got a set of reactive measures in response to pressures in Parliament that together don’t necessarily constitute an energy strategy: there’s still quite a long way to go,” he says. “The government isn’t really in a position where it meaningfully makes choices because Parliament’s not there.”

What’s only “partly recognised” is an understanding of the scale of institutional changes required to deliver the transformation of the UK’s energy system, says Bell, who is now head of policy at consultancy Stonehaven.

Much of the institutional change currently in the pipeline, notably the establishment of an independent system operator to take over this function from the National Grid ESO, is being brought forward via the Energy Security Bill.

However, reflecting the sclerosis that has beset government amid the wider Westminster turmoil over recent months, this legislation was paused in September and only resumed its passage in the week before Parliament’s Christmas recess began.

The UK is moving “too slowly across the board” on energy policy, says Bell. “We are being held back by the fact that we can’t get stuff done quickly enough.”

The “number one” issue in this bulging policy in-tray is the government’s review of the electricity market, which ministers have said little about since the consultation on it finished during the summer, says Dey. “Certainty market design is a big one,” he adds. “If there’s uncertainty around market design it makes it very difficult to invest in assets that are going to be on the system for 20, 30 or 40 years. We need to make those decisions now: that’s something that needs to be solved very quickly.”

The UK has set the pace on offshore wind development over the past decade. But the country now faces mounting competition in attracting low-carbon investment.

“If you look at the sea change in governmental policy across Europe, particularly over the last nine months or so since the Ukraine crisis, pretty much every single European country has moved to double down on energy security, which tends to be low carbon by default now. There is now really stiff competition for parts and supply chain and for labour as well,” says Berman. “There are significant questions as to whether our investability is as robust as it was.”

He adds that the government also has its work cut out to put in place a regulatory regime that ensures the UK can offer a competitive advantage over other jurisdictions.

But pointing to the government’s “arbitrary intervention” to impose a higher windfall tax rate on low-carbon generation than fossil fuel production, Berman says: “It just sends a really challenging message to investors about the way the UK values the low-carbon generation that’s going to provide the bedrock of the net-zero economy. If there is no money to be made, it will be an incredibly costly transition that the government has to substantially finance: that’s not the most efficient way of doing it.”

“If you’re an investor, it [the UK] is already a more uncertain place to invest,” Ralston says, adding that the UK government’s relative lack of ambition is reflected by its target to reduce energy demand by 15% by 2030, which the EU aims to do this winter.

However, Dey, whose company has offices in other European countries, believes the UK remains an attractive place to invest in net-zero infrastructure due to the “clear” direction of travel the government has set. “While there are some big uncertainties in the market that probably will deter some investors, overall in the global race for net zero, the UK is still probably a leading country,” he says.

But there is no room for complacency, Dey says: “We’ve made progress over the past 12 months but we’re still quite far away if we want to get to net zero.”

Sunak’s onshore wind volte-face may have secured peace at Christmas in the Tory parliamentary party on this issue. However, the new year offers no end in sight for the energy security challenges facing his government.