BEIS consults on changes to the planning regime for energy storage

The Department of Business, Energy & Industrial Strategy has an open consultation on government's proposed changes to the treatment of energy storage under the planning system.

The consultation closes on 25 March 2019. Details of the consultation are available online.

The consultation is seeking views on where the energy storage should be pegged in the various tiers of the planning system: NSIP/DCO, Town and Country Planning, and permitted development.

The objective of the consultation

BEIS' objective is to remove barriers to smart technologies such as electricity storage, whilst maintaining technology neutrality. The objective of the consultation is no doubt to manage the unintended consequences of the changes should they be made, and in the context of the complexity of planning legislation for energy developments across England, Wales and Scotland, the scope for such unintended consequences is wide.

The two key questions in the consultation consider:

• whether the level and unit of the 50MW capacity threshold for non-wind onshore generating stations in the Nationally Significant Infrastructure Projects (NSIP) regime is appropriate for electricity storage; and
• how composite projects, consisting of storage and another form of generation, should be treated with regards to the NSIP capacity threshold.

Should energy storage facilities be NSIP if greater than 50MW capacity?

The consultation is part of BEIS' policy development for energy storage that has been ongoing since November 2016. This has already led to energy storage facilities being confirmed as a form of generating station, and thereby rendering them capable of being NSIP if greater than 50MW capacity. The question BEIS is asking is whether this is appropriate.

BEIS appear minded to conclude it is. However, their evidence base to support this conclusion is questionable and their assumption that the planning costs are not determinative in decisions to invest because they represent a relatively small component of the total cost of an energy storage scheme runs deep through their conclusions.  This assumption does not fit with our experience. Planning costs are 'at risk' costs and they are significant because investors are reluctant to fund projects until, among other things, planning consent has been secured.

If the answer to the question 'is 50MW capacity appropriate?' is 'no', then that begs the follow-up question 'what is the appropriate trigger for energy storage projects?'

The answer may be technology driven, based on the optimisation of grid connection arrangements. The optimal battery storage capacity will be different for a 33 KVA connection than for a 132 KVA connection, and it is only the latter that are currently available, so maybe a trigger around 120MW may be appropriate. Alternatively, given the relatively benign land use impact of energy storage projects compared to other generating station schemes, the trigger could be switched from a capacity to a project footprint metric. Even more radically the trigger for energy storage NSIP could be removed, taking energy storage schemes out of the NSIP process entirely.

Proposals for composite sites

BEIS' proposals on composite sites are progressive and more likely to deliver on BEIS' ambition to deliver a more flexible energy market. Proposing that the addition of up to 50MW of energy storage at existing sub-50MW generating station will not trigger a requirement for a DCO application is attractive. However it will create anomalies, particularly when the proposed carve-out for on-shore wind is taken into account.

Where should capacity be measured?

There are pertinent uncertainties in the planning system which are not touched by the consultation, such as the location at which the capacity should be measured: installed capacity or export capacity; and details of the criteria for identifying when co-located generating stations should be treated as a single generating station. These uncertainties will continue regardless of government's position following this consultation.

Energy storage – what use class?

The consultation also provides an insight to BEIS' interpretation of the use class for energy storage. The consultation references Part 7 of Schedule 2 of the Permitted Development Rights Order 2015. Class H in Part 7 deals with industrial and warehouse developments, which are use classes B2 and B8. Battery storage developments on industrial land could therefore consider whether they might be able to proceed under permitted developments. This would create a potentially dramatic cliff-edge, with planning consent for developments up to 49.9MW being secured by way of permitted development (low cost and simple process), and those of 50MW and above requiring a full blown Development Consent Order (high cost and complicated process).

We will monitor and report on the outcome of the consultation. 

TLT have experience in dealing with a wide range of energy storage projects. Read more about our expertise.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at January 2019. Specific advice should be sought for specific cases. For more information see our terms & conditions.