Westminster Watch: Policy updates revitalise onshore wind development in England

The Labour Party won a landslide majority in the UK General Election on Thursday 4 July, with a total of 412 seats – 291 seats more than the Conservatives. This has led to a significant political shift across Westminster and Whitehall. New ministers are taking up their posts in the first Labour government for 14 years.

With former Labour Party leader Ed Miliband MP as Secretary of State for Energy Security and Net Zero, the new government is committed to decarbonising all sectors of the UK economy by 2050 – and has already taken significant steps to implement its strategy for doing so.

Labour’s manifesto committed to bringing forward the Conservative’s clean energy target by five years to 2030. The manifesto detailed plans to double onshore wind, triple solar power and quadruple offshore wind by 2030. In government, the work to deliver on these commitments has already begun. Prime Minister Sir Keir Starmer made his priorities clear by releasing a policy statement on onshore wind just four days after arriving at 10 Downing Street.

This Westminster Watch has been written in collaboration with James Carter, Head of UK Energy and Natural Resources, Natasha Luther-Jones, International Head of Sustainability, and the UK Government Affairs team.

ONSHORE WIND IN ENGLAND: A DECADE OF MISSED OPPORTUNITY?

The state of onshore wind development in the England over the last ten years has been heavily restricted by central planning policy. Since 2015, only a handful of onshore wind projects have been approved by government – despite being one of the lowest priced sources of energy to generate and quickest to build, as DLA Piper’s article, The state of play for onshore wind in England, highlighted last year.

In 2015, Amber Rudd, then Secretary of State for Energy and Climate Change, announced two consequential changes to planning guidance, reasoning that “we now have enough onshore wind in the pipeline” to meet renewable energy commitments.

Two footnotes were added to the National Planning Policy Framework (NPPF), specifically targeted at future onshore wind farm developments. The first required a near-total absence of local opposition to onshore wind project proposals, setting a threshold that in practice made moving forward through the planning process almost impossible. The second footnote set a high threshold for proving that an area was geographically suitable for onshore wind projects.

Combined, the two footnotes set a higher bar for onshore wind project development than was set for other forms of development.

As a result, between 2016 and 2022, only 17 small scale onshore wind farms have been granted planning approval. In 2022, just two of these were given the green light. 2023 saw only one turbine constructed across the whole of England.

The wording of the footnotes has been softened since 2015, most recently in September 2023, after the government ran a consultation on the NPPF that received 26,000 responses. Community impacts were then required to be “appropriately” rather than “fully” addressed. In practice, however, their effects remained much the same, stifling activity in the sector.

A NEW APPROACH TO THE SECTOR

Just four days in to the new government, several government departments jointly released a new Policy statement on onshore wind. The policy statement announced the government’s intention to immediately remove the “de-facto ban on onshore wind in England”.

Footnotes 57 and 58 to paragraph 163 of the NPPF have been scrapped altogether. The policy tests no longer apply, and onshore wind planning applications will now face the same planning thresholds as other development proposals.

Removing these footnotes certainly goes a long way to ease the uncertainty that the previous policy (and its subsequent changes) resulted in.

However, the footnotes have been in place for nearly a decade and as such, have significantly reduced the pipeline of interest in onshore wind development projects in England. There may be a time lag (possibly of several years) before we see the benefits of the policy statement come into force on an industry-wide scale.

That being said, investment interest in onshore wind is healthy in Scotland and Wales, which are not covered by the NPPF so not subject to these restrictions. Providing the government’s Contracts for Difference (CfD) auction mechanism remains adaptable and responsive to shifting market dynamics, investment in onshore wind in England and across the UK could thrive in the years to come.

WHAT NEXT FOR ONSHORE WIND?

These changes took effect on 8 July 2024. Since then, energy companies and international developers have either announced plans for new onshore wind projects or confirmed that they are in the process of exploring potential options.

The Community Benefits Protocol for onshore wind will also be updated, following on from a consultation launched by the Conservative government which concluded in February 2024.

Alongside this, the government has committed to consulting with industry on expanding the Nationally Significant Infrastructure Project regime – which speeds up the planning process for key projects – to include large-scale onshore wind developments. This would be linked to a broader upcoming revision of the NPPF, supporting renewable development in all forms.

The Planning and Infrastructure Bill presented in the King’s Speech in July promised to streamline the delivery process for all critical infrastructure, boost renewable energy, benefit local communities, achieve clean power by 2030 and reinforce the UK’s domestic energy security.

On 18 July, Secretary of State for Energy Security and Net Zero, Ed Miliband MP, convened the newly created Onshore Wind Industry Taskforce, to accelerate the deployment of onshore wind to 2030 and beyond. The Taskforce is comprised of leaders from the largest companies in the onshore wind sector, key government and regulatory bodies and trade unions.

The Taskforce has been commissioned to identify the barriers holding back a substantial and efficient build out of the UK’s onshore wind capacity. A systematic, targeted approach to overcoming financial, regulatory and policy hurdles will be crucial to achieving the government’s aim of doubling onshore wind by 2030.

Opportunities to further support the sector, which the Taskforce may consider, could include reforming the Environmental Impact Assessment requirements. At present, the UK’s Environmental Impact Assessment process is considered by many investors to be a long and expensive undertaking compared to other markets. The overview of the Planning and Infrastructure Bill found in the background briefing to the King’s Speech acknowledges this, noting that these assessments can run “to tens and thousands of pages”.

In addition, if the aim is to double the production of onshore wind in the UK, the impact of this intermittent generation on the UK grid ought to be carefully considered. If this is truly to be a long-term renaissance for onshore wind in England, then grid upgrades will be necessary. The new Labour government is also considering this – the Taskforce includes a representative of the National Grid’s Energy System Operator and the King’s Speech briefing noted the government’s intention to accelerate upgrades to the national grid.

In the first few weeks of the new government, Labour moved quickly to set out a substantial agenda of reforms in support of the UK’s onshore wind industry. As is always the case, over time we will see whether this momentum leads to a sustained improvement in the attractiveness of the UK to onshore wind investment. A long-term, consistent approach to the sector could have many advantages, such as embedding benefits into local communities and creating new jobs across supply chains.

HOW WE CAN HELP

DLA Piper has unparalleled knowledge advising the renewable energy sector, as well as a deep understanding of the challenges and opportunities facing onshore wind companies in a changing business and regulatory environment.

James Carter leads the UK Energy and Natural Resources team, along with Natasha Luther-Jones, International Head of Sustainability and ESG and Energy and Natural Resources Global Co-Chair. Their work supports the full spectrum of a company’s legal requirements, advising on developments, investments, financings, refinancings, acquisitions, disposals and all key project documentations as well as complex commercial arbitration and litigation.

Working together with the lawyers focusing on the Energy and Natural Resources sector, our Government Affairs team supports clients to take a proactive approach to addressing the risks and opportunities arising from political change.

Unlike government affairs agencies, we combine political, legal and regulatory knowledge with an in-depth understanding of the workings of Westminster and Whitehall. As regulated Consultant Lobbyists, we’re well versed in supporting you in executing sophisticated engagement and advocacy strategies.

Our clients also benefit from the insights and understanding of our Strategic Consultants Lord David Blunkett, Lord Edward Garnier, Lord Gavin Barwell and Lord Andrew Tyrie.

Please contact Paul Hardy for further information on how we can support you to navigate the opportunities arising from a new government in the UK.