46 England & Wales
The government has also put a lot of thought into the business models for CCUS and , amongst other papers , in 2020 published ‘ A Government Response on potential business models for CCUS ’ under which they conducted a series of engagements , alongside CCUS consultations , with key stakeholders and interested parties including in respect of CCUS deployment strategies .
The Energy Security Bill , if it enters into law , will establish an economic regulation model for CO 2 transport and storage through the ‘ Industrial Carbon Capture ’ business model that will offer a capital grant for certain projects and ongoing revenue support .
3.15 What are the main sources of financing for the development of carbon capture and storage projects in your jurisdiction ?
The financing of carbon capture and storage projects in the UK remains at a nascent stage . However , in June 2022 , the new publicly owned UK Infrastructure Bank announced its strategic plan to deploy £ 22 billion of capital to tackle climate change and boost regional growth and a central pillar of that plan was to accelerate the deployment of new technologies such as CCUS . The primary issue for financing CCUS projects on a limited recourse basis remains the lack of a long-term identifiable revenue stream .
42 Consents and Permits
4.1 What are the primary consents and permits required to construct , commission and operate utilityscale renewable energy facilities ? Does the consenting and permitting regime differ for specific types of renewable energy facilities , such as nuclear , offshore wind , battery storage , or others ?
In England , utility-scale projects with more than 50MW of capacity , or 100MW for offshore wind , are subject to the Planning Act 2008 ( Planning Act ) and are deemed ‘ nationally significant infrastructure projects ’ requiring specific consent from the Planning Inspectorate , which acts on behalf of the Secretary of State for DESNZ . This excludes electricity storage projects ( except for pumped hydro ), which were recently carved out of this regime .
Consent is required under the Electricity Act for utility-scale projects that are not subject to the Planning Act or the Town and Country Planning Act 1990 ( TCPA ), such as offshore wind projects with a generating capacity of greater than 1MW but less than 100MW . Applications under the Electricity Act are considered by the Secretary of State for DESNZ .
The installation of the project will need to comply with development regulations , including the Construction ( Design and Management ) Regulations 2015 , which sets construction requirements and restrictions .
The Electricity Act provides that it is an offence to generate electricity for the purposes of supply to any premises without a licence or exemption . Licences are granted by Ofgem . The Secretary of State for DESNZ may grant specific or class exemptions to this requirement .
The Electricity ( Class Exemptions from the Requirement for a Licence ) Order 2001 ( SI 2001 / 3270 ) ( Class Exemptions Order ) provides a number of class-based exemptions to the general licensing requirements under the Electricity Act . Smaller utility-scale generators may benefit from the ‘ Class A ’ exemption , for facilities that do not at any time provide electric power in excess of 10MW ( for facilities with a declared net capacity of greater than 100MW ) or 50MW ( for facilities with a declared net capacity of less than 100MW ).
In addition , generators must comply with relevant health and safety legislation and industry codes in order to operate their facilities , such as the Balancing and Settlement Code , the Connection and Use of System Code ( CUSC ) and the Distribution Use of System Agreement .
In respect of offshore wind projects , the Crown Estate Commissioners on behalf of the Crown Estate , is the body responsible for awarding seabed rights in England & Wales ( with the Crown Estate Scotland being responsible for Scottish Waters ). Pursuant to an auction process , following a multitier qualification process , the Crown Estate will grant ‘ Agreements for Lease ’ which will generally cover the area where the generating asset will be located , as well as the offshore substation and cable route . The Agreement for Lease contains an option right for the developer to enter into a full lease , on satisfaction of conditions related to obtaining the necessary permits and consents . The planning permission required for such offshore wind projects is in the form of a development consent order ( DCO ) from the Secretary of State . A DCO application is made to the Planning Inspectorate ( an executive agency of the Department for Levelling Up , Housing and Communities of the government ) who considers the application and makes a recommendation to the Secretary of State , who will decide whether development consent should be granted for the proposed scheme .
As part of these consents , the developer will also likely need to submit an environmental impact assessment ( EIA ) to the Secretary of State , analysing the likely significance of the project ’ s expected environmental impact . The application by the developer for a marine licence ( if not subsumed into the DCO ) from the Marine Management Organisation may also be required . In respect of the requisite onshore connections , developers will also require consent to construct a cable connection onshore , and an agreement to connect to the transmission system as operated by the NGESO .
4.2 What are the primary consents and permits required to construct , commission and operate distributed / C & I renewable energy facilities ?
In England , distributed and C & I renewable energy facilities are likely to fall beneath the 50MW threshold under the Planning Act and will instead be subject to approval under the TCPA . Onshore wind farms , including facilities with generating capacity in excess of 50MW , are subject to the TCPA planning regime due to the perceived increased local impact caused by their construction and operation . Planning applications under the TCPA are made by generators to the local planning authority .
Certain microgrids with a generating capacity of 50kW or less may benefit from permitted development rights where planning permission is deemed to have been granted without the need for an application to the local planning authority .
The requirement for a generation licence under the Electricity Act applies equally to distributed renewable energy facilities , although distributed renewable energy facilities are likely to benefit from the Class A exemption under the Class Exemption Order .
Generators of distributed renewable energy must also comply with relevant industry codes in order to operate their facilities , as described in question 4.1 .
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