Contributors
Electricity storage is a key technology in the transition to a smarter and more flexible energy system. It will play an important role in helping to reduce emissions to Net Zero by 2050.
The Planning Act 2008 sets out criteria for when certain infrastructure projects need to seek planning consent from the Secretary of State under the Nationally Significant Infrastructure Projects (NSIP) regime as opposed to consent from the Local Planning Authority (LPA) under the Town and Country Planning Act 1990 (TCPA). The NSIP regime for electricity storage projects superseded consents required under section 36 of the Electricity Act 1989 (no longer used except for variations to existing section 36 consents).
Recent rapid development of energy storage projects has led National Grid to increase projections of storage growth in the 2020s in most of its future energy scenarios, but there was evidence that the consenting process was a barrier to its increased deployment and in particular that the 50MW capacity threshold above which the NSIP regime applied was distorting project sizing and investment decisions.
This led to the Government issuing two consultations in 2019 with a view to reforming the process to make it simpler for larger scale storage facilities to secure consent for development.
Government consultations
The first consultation proposed to amend the planning regime to make it simpler to seek permission to co-locate storage with other forms of generation. Significantly, respondents agreed with making it simpler to co-locate storage with other forms of generation, but 76% disagreed with the proposal to retain the 50MW NSIP threshold for standalone storage facilities.
For example, the Government received evidence that there is a clustering of facilities sized just below the 50MW threshold, with no standalone facilities sized above this. Also, projects have been split into multiple 49.9MW projects in order to avoid the NSIP consenting route.
Following this feedback the Government published a further consultation on a new proposal to carve out electricity storage (except pumped hydro), from the NSIP regime in England and Wales. We considered the proposals in some detail in our briefing on BEIS' follow up consultation.
What is now being done and why?
The Government's view is that the significantly lower planning impacts of storage (except pumped hydro storage, see Endnote 1), mean that it does not consider it appropriate that these types of projects should be consented through the NSIP regime, unless directed to apply through section 35 of the Planning Act 2008.
To take energy storage projects out of the NSIP regime the draft Infrastructure Planning (Electricity Storage Facilities) Order 2020 has been made and it is due to come into force on 2 December 2020. It applies to England and Wales.
Separately, the Electricity Storage Facilities (Exemption) (England and Wales) Order 2020 also comes into force on 2 December 2020 and amends the Electricity Act 1989. It removes the need to seek planning consent under section 36(1) of the Electricity Act for electricity storage (except pumped hydro storage) in England and Wales.
The effect of the amendments will be that electricity storage (except pumped hydro storage), will no longer need to seek consent under the NSIP regime in the Planning Act 2008 in both England and Wales. To ensure consistent treatment and a level playing field in economic competitiveness, the change also applies to Wales where the NSIP threshold is currently 350MW.
This means that in future all standalone storage (except pumped hydro) projects in England will be consented by the LPA under the TCPA, unless directed into the NSIP regime by the Secretary of State (e.g. following a request by the developer, LPA, an objector etc.) under section 35 of the Planning Act 2008 which will continue to apply.
In Wales, planning decisions for electricity storage (except pumped hydro) of any size will also generally fall to be consented by the relevant LPA under the TCPA regime, whereas currently this is only the case for electricity storage (except pumped hydro) below 350MW.
Where storage is co-located alongside another form of generation, the storage element of such a project will no longer trigger the MW capacity thresholds set out in the NSIP regime. However, developers may be able to include storage within a Development Consent Order (DCO) as associated development if, in a composite scenario, the other form of generation has fallen into the NSIP regime. For more information see our briefing on the BEIS follow up consultation, which also provided some clarification in relation to composite projects.
National Planning Practice Guidance
BEIS has confirmed that it is working with the MHCLG to update the renewable and low carbon energy planning practice guidance (PPG) to refer specifically to electricity storage. The PPG supports the National Planning Policy Framework (NPPF) setting out the Government’s planning policies for England and how these are expected to be applied.
Ofgem's new definition for electricity storage
Ofgem's open letter published on 2 October 2020, announced that it is implementing a definition of electricity storage as a sub-set of generation to be captured within the electricity generation licence conditions and that the new definition is due to take effect from 29 November 2020. It is also amending the definition of 'generation business' and 'generation set' to include explicit reference to 'electricity storage'.
Given the constant evolution of storage technologies the Ofgem letter attaches in 'Appendix A' a non-exhaustive list of technologies that currently meet the definition of electricity storage.
The new proposed licence condition E1 on electricity generation licensees to provide information in relation to the facilities they own or operate to their relevant supplier has been slightly amended but will be included.
The proposed changes will apply to all electricity storage facilities operated by a licence holder, regardless of their capacity (including licensed facilities below 50MW, but note that facilities below 50MW can be licence exempted).
Comment
The change brought in by these orders is significant in removing a key barrier to the deployment of large-scale storage facilities. In addition the Government has indicated its commitment to define storage in primary legislation when parliamentary time allows.
The Government has stated that there is currently about 1GW of battery storage in the GB system, with the majority deployed since 2015. In addition there are about 9GW of storage in the planning pipeline, 6GW of which is battery storage.
The Prime Minister outlined his ten point plan for a green industrial revolution on 18 November 2020. Announcements included that the UK will end the sale of new petrol and diesel cars and vans by 2030, ten years earlier than planned. He also reiterated the previous commitment to increase offshore wind capacity to 40GW by 2030. To achieve this and Net Zero at the lowest cost, significant levels of flexibility to integrate high volumes of low-carbon power, heat and transport will be needed. This will require a significant increase in the deployment of electricity storage. The changes contained in this order help to unlock the potential for large-scale storage facilities critical for meeting Net Zero and an uptake in these projects may be anticipated, indeed National Grid has estimated that up to 40GW by 2050 may be needed.
Removing the NSIP threshold for energy storage is likely to lead to more storage projects being deployed at larger sizes and the Government has indicated that it will seek to encourage projects to deploy at a larger scale rather than bring forward new projects.
This SI may reduce costs where projects now choose to co-locate rather than build separately and may therefore unlock investment in larger storage projects.
As LPAs already have some experience of dealing with projects below 50MG the Government does not foresee any problems with LPAs consenting larger storage projects. However given the current resourcing of local authorities one has to hope that the Government's optimism on this is borne out.
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Endnotes
(1) Pumped hydro. Government is retaining the 50MW NSIP threshold in the case of pumped hydro storage due to the larger planning impacts of this technology which in its view make the NSIP regime a more appropriate consenting route
